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Sustainable Economic Development

Levels of DevelopmentThe new wave of sustainable economic development focuses on promoting businesses, industries, and real estate development that are low carbon, low pollution, energy/resource efficient, and ecologically supportive. In the climate of depleting economic sources and limited conventional lenders, innovative financial tools are critical to realize the economic goals of communities while preserving valuable non-renewable resources.

 Mixed-use, mixed income, walkable, transit-oriented development (TOD) is a key component of sustainable economic development. Various best practices and examples for innovative financing tools and programs are available nationally to implement sustainable development projects and TODs. However, some of the sources can limit the use to fund projects in particular cities or the State of Texas due to local ordinances or State legislation. Every funding option has specific rules, legal limitations on its use, and other possible trade-offs. The four primary limitations that a city will have to choose between are:

  • Higher tax rates in the development.
  • Higher taxes for those outside the development.
  • Changes in control of development.
  • Increased financial risks that come with debt.

Beyond these four tradeoffs, there is the complexity of the program requirements, tradeoffs of alternatives of that particular incentive, level of commitment shown to potential developers by the program, and alternative uses for that particular funding source.

Sales tax and property tax are the primary source of local government funding. Beyond using local tax revenue to encourage or subsidize a targeted business, there are several state and federal programs that aim to encourage development around transit. Some of these programs are given to cities as grants according to formulas set by their laws and other programs require submitting a competitive bid. Cities are left to find the best method for achieving its development goals.

The links below provide a brief summary of innovative financing tools available for sustainable development, TOD, and supporting infrastructure.

The links below provide a summary of various innovative financing tools for sustainable development in a comparative table:


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