From Vision to Dollars: The Political and Financial Engine Driving Smart Growth

Mary Baker
Sep 14
9 min read

Prescott, AZ—

Why the Push for the Smart Growth Vision?

Smart Growth is not just a planning strategy — it is the proffered American expression of a global vision. As we have been discussing, the vision is rooted in the United Nations' framework for Sustainable Development and emerged through national policy initiatives such as President Clinton’s Council on Sustainable Development and President Obama’s Partnership for Sustainable Communities. These initiatives positioned the U.S. to “do its part” in achieving the U.N.’s stated goal of integrating the social, economic, and environmental dimensions of sustainability.

Smart Growth Vision: The Emerald Smart City. Image from Adobe Stock

According to the dominant narrative, America must transform its way of life to address alleged global crises expressed as excessive resource consumption, income inequality, and the catastrophic effects of manmade climate change. Since the early 90s the prescribed solution has been a comprehensive reordering of society, led by planning professionals, environmental activists, and centralized agencies working in tandem to restructure urban, suburban, and rural communities through new paradigms such as Social Equity, Economic Justice, and Environmental Justice.

The global financial crisis of 2007–2008, paired with the emotional momentum generated by Al Gore’s documentary An Inconvenient Truth, helped accelerate public acceptance of this agenda. These events created a climate of fear, urgency, and dependency—an ideal environment for rolling out sweeping changes that may not have passed public scrutiny under normal conditions. In the name of sustainability and survival, communities were introduced to the “solutions” of Smart Growth: compact living, climate action plans, mobility equity, and carbon-neutral urbanism.

While the language of Smart Growth suggests public participation, shared prosperity, and ecological stewardship, the reality is far more coercive. Planners and government partners increasingly relied on federally guided grants, regulatory incentives, and predetermined "community visioning" processes to bypass genuine public debate. A closer look reveals that Smart Growth is often an instrument of centralized control that conflicts with American traditions of private property rights, free enterprise, and local self-governance.

California continues to be at the forefront of codifying Smart Growth principles into binding law. Measures from 2006 such as the Global Warming Solutions Act (AB32), the Sustainable Communities Strategy (SB 375), and the Climate Adaptation Strategy (E.O. S-13-08) represent not just climate policy but sweeping land use mandates with significant local consequences. These laws effectively shifted decision-making power from local elected officials to regional planning authorities, state agencies, and outside consultants and were driven by compliance rather than community preference. None of these laws have been overturned and continue to pressure communities, today.

Arizona’s engagement with this transformation can be traced back to Governor Janet Napolitano’s Executive Order 2006-13, which committed the state to reduce greenhouse gas emissions to “2000 levels by 2020, 50% below by 2040, and 90% below by 2050, with a special focus on transportation”. This was one of Arizona’s earliest formal acknowledgments of climate-related planning and marked the beginning of a long-term shift in state policy. Though the executive order was not codified into binding legislation, it established a framework for agencies and municipalities to follow.

To justify these early conversions, officials and nonprofits would often cite (cherry-pick) highly managed surveys, such as the National Association of Realtors’ 2011 Community Preference Survey, to claim that Americans preferred walkable urbanism, denser housing, and more transit options. These carefully framed narratives and use of climate change propaganda were then used to override dissent and assert that Smart Growth reflected the "will of the people."

This trajectory continues with programs like the Clean Arizona Plan led by Governor Katie Hobbs’ Office of Resiliency in partnership with Arizona State University and Northern Arizona University. This program, funded by a $3 million federal climate grant, targets major emission sources with renewable energy, EV infrastructure, and efficiency projects — aiming to cut 8.8 million metric tons of greenhouse gases while channeling hundreds of millions in investment to underserved communities further embedding Smart Growth ideology into Arizona's state and regional governance.

But do these plans reflect local needs—or global goals?

This author has repeatedly remarked that public participation is often manufactured. Professional facilitators guide community members through scripted exercises designed to align with federal grant requirements. While residents are told they are shaping their future, they are in fact validating preapproved outcomes. Small business owners and homeowners are persuaded to accept increased taxes or regulatory burdens under the illusion that these sacrifices are for the greater good. But in many cases, the cost is borne not just in dollars—it is paid in the currency of lost autonomy, reduced opportunity, and eroded community identity.

F. A. Hayek, Nobel laureate and author of The Road to Serfdom, warned, that

Achieving by coercion these ends is not compatible with the preservation of a free society, as it tends to subordinate personal and economic freedom to the demands of the State.

The Road to Serfdom is a book by the Austrian-British economist and philosopher Friedrich Hayek. Image by Wikipedia.

Hayek’s insight remains profoundly relevant as the Smart Growth vision continues to advance under the banner of sustainability, often without regard to the foundational liberties that define the American experiment.

Funding for Smart Growth: From Legacy Initiatives to the Inflation Reduction Act

Smart Growth is no longer just a planning philosophy—it’s a multi-billion-dollar government-industry alliance reshaping land use, infrastructure, and community development across America. While state and county governments, private donors, and businesses contribute to funding smart growth initiatives, the primary driver has been the federal government.

Early Funding Foundations: Clinton-Gore Era to Obama’s Partnership for Sustainable Communities

The origins of federal Smart Growth investment can be traced back to 1999, when President Clinton and Vice President Gore unveiled the Livability Agenda and Lands Legacy Initiative. These proposals triggered a massive federal investment in “sustainable development” projects—covering everything from brownfield remediation and transit-oriented development to open space acquisition and urban forestry.

The FY2000 budget resolution allocated billions under the Natural Resources and Environment (Function 300) to fund:

Federal tax credits in lieu of bond interest
Increased federal transportation grants for non-road projects
Matching funds for local and regional planning
Grants to purchase easements, preserve farmland, and promote smart growth in rural areas

Simultaneously, the Lands Legacy Initiative proposed land acquisition for wilderness designation and provided direct grants to states and municipalities to support open space, habitat protection, and urban green infrastructure.

By 2005, smart growth funding had become an embedded norm in state and local policy. Cities across the U.S. began rebranding their general plans with titles like Sustainable Chattanooga (TN), Sustainable Seattle (WA), and Sustainable City Plan for Berkeley (CA). Local leaders pledged support for sustainable development at conferences and in city council chambers—often motivated by the availability of federal funds and philanthropic partnerships.

In 2009, the Obama Administration further institutionalized these programs through the Partnership for Sustainable Communities, a collaboration between HUD, DOT, and the EPA. This streamlined funding and advanced six “Livability Principles,” prioritizing: Transportation choices, Equitable and affordable housing, Economic competitiveness, Support for existing communities, Coordination of federal policies, and Valuing community character and sustainability.

Grants through this partnership funded regional planning organizations, public transit development, high-density housing, and climate resilience efforts—but always with stipulations. Only plans that incorporated mixed-use development, walkability, transit-oriented housing, and equity frameworks would qualify.

The 2020s: Climate Policy and the Inflation Reduction Act Despite multiple recessions and federal spending debates, Smart Growth funding was reinvigorated under the Biden Administration, especially through the 2022 Inflation Reduction Act (IRA)—a $369 billion climate and energy investment package, the largest in U.S. history. This renewed push built on earlier federal programs, such as the Department of Transportation’s TIGER Grant program launched during the Obama Administration, which directed billions toward transit-oriented development and infrastructure aligned with Sustainable Development criteria.

Key IRA funding streams that directly or indirectly supported Smart Growth initiatives included:

Greenhouse Gas Reduction Fund – $27 billion for projects that reduce emissions, including clean transportation, building electrification, and climate-resilient housing
Neighborhood Access and Equity Grant Program – $3 billion in competitive grants for equity-focused transportation, remediation of legacy infrastructure, and anti-displacement measures
Environmental and Climate Justice Block Grants – Targeted investments in low-income, historically marginalized, and overburdened communities
Energy Efficiency and Conservation Block Grants (EECBG) – Funding for local retrofitting projects, clean mobility, and sustainable infrastructure planning
Technical Assistance and Regional Planning Grants – Supporting state and municipal governments in aligning development with federal climate and sustainability goals

Property Owner and his dog. Image by Adobe Stock.

By the end of 2024, Biden’s E.O. 14008 on Tackling the Climate Crisis at Home and Abroad mandated a “whole of government” approach which meant that nearly every federal infrastructure and housing grant included a climate equity component. Smart Growth principles were embedded in scoring rubrics for competitive funding and Arizona cities, from Tucson to Flagstaff to Phoenix, increasingly pursued these funds, aligning local comprehensive plans with federal sustainability metrics. See Yavapai County 2025 Comprehensive Plan.

What This Means for Local Governments and Property OwnersToday’s Smart Growth funding environment is more restrictive. Local governments frequently hire grant writers and consultants or work with regional climate-focused stakeholder non-profit organizations to match project proposals to narrow eligibility criteria. Proposals that include high-density housing, address climate mitigation, offer “transportation equity”, or place an emphasis on gender diversity are unlikely to succeed.

Over the years, federal funding evolved from optional support to a powerful lever shaping urban policy. Grant conditions increasingly determined how municipalities zoned land, regulated housing, and designed transportation networks. In this context, Smart Growth became both a funding mechanism and a compliance system—entrenching central planning under the guise of environmental and social good. Read USDA’s Regional Conservation Partnership Program (RCPP) for a good example of how these grant programs work.

As of 2025, the Trump Administration does not support centralized, federally driven planning mandates rooted in legacy Smart Growth policies. In fact, cities that continue to shape their general plans around these outdated paradigms may find themselves less competitive for federal grants under the current administration. This marks a significant shift from prior funding frameworks, where compliance with climate-based and equity-driven criteria often dictated eligibility. This is a welcome departure from the top-down mandates that have defined federal planning initiatives over the past two decades. We must remain vigilant, as many of the general plan updates moving forward today are still bogged down in the entrenched assumptions of Smart Growth ideology.

The Bigger Picture

Smart Growth is not simply about urban design or housing choices. It is about reshaping society to fit a centralized ideal—where carbon footprints replace character, and metrics outweigh individual ambitions. By examining the motivations behind this movement, Americans can better assess whether the future being sold to them is truly sustainable—or merely strategically managed and on a timeline. F.A. Hayek warned in The Road to Serfdom, that

Emergencies have always been the pretext on which the safeguards of individual liberty have been eroded.

Coming Next in our Civic Awareness SeriesIn the next installment of our Civic Awareness Series, The American Smart Dream: How 21st Century Planning Redefines Property, Liberty, and Land Use, we explore how the vision of the American Dream is being reshaped — not by free markets or community choice that gradually refines how we grow and develop — but by “creatively resetting” the way we live, work, and interact.

We’ll examine how property rights extend far beyond mere land ownership, ask whether America can survive the Smart Growth vision, and reveal the contours of the “American Smart Dream” — a future where private property is conditional, freedom is managed, and prosperity is redistributed according to a master plan.

RESOURCES

15-Minute City

2001 UNEP and WMOThird IPCC Report

Agenda 21 / Agenda 2030

American Planning Association Growing Smart Guidebook

iden’s E.O. 14008, Tackling the Climate Crisis at Home and Abroad

City of Prescott

City of Prescott 2025 General Plan Update

Climate Adaptation Strategy

Council on Sustainable Development

Earth Charter

F.A. Hayek