Through already existing pilots, public-private partnerships should evaluate how individual development accounts (IDAs) can achieve sustainable community objectives. IDAs provide a means to build wealth for the poor and low-income by matching savings with funds from external sources such as foundations, corporations, religious institutions, and government. Building personal assets and facilitating connections to mainstream banks can be vital in building sustainable communities in distressed metropolitan and rural areas. Over 20 states have changed their policies to enable IDA experiments, many of which are being coordinated by the Corporation for Enterprise Development, a nonprofit organization based in Washington, D.C. A 1999 initiative of the U.S. Treasury Department that mandates electronic funds transfer for federal distributions provides a unique opportunity to link welfare and welfare-to-work recipients with mainstream financial institutions.

The federal government should work with lenders to expand research on location-efficient mortgages. The location-efficient mortgage (LEM) is intended to enable homebuyers to shift money saved on transportation costs to housing. The LEM Partnership, begun in 1996, includes the Center for Neighborhood Technology, the Natural Resources Defense Council, the Surface Transportation Policy Project, and Fannie Mae. It is conducting pilots in Chicago, San Francisco, Los Angeles, and Seattle in which first-time homeowners can qualify for up to $35,000 more for the same family income because they live near public transit.35 Analyses of urban access are also underway in Miami, St. Louis, and Milwaukee. In support of proposed White House actions on smart growth and regional collaboration, leaders from relevant sectors should help EPA, HUD, and the U.S. Departments of Energy and Transportation track, evaluate, and enhance the use of location efficiency as an incentive for smart growth and sustainable development. These agencies, along with foundations, financial institutions, and community- based organizations, should also identify ways that better information can help the marketplace value location efficiency.

The federal government, working with state and local governments and the private sector, should provide incentives to capture the air quality benefits of compact development. A recent EPA study demonstrates that developing infill sites rather than greenfield sites on the fringe of developed areas results in lower vehicle-miles traveled because people live closer to work, schools, shopping, and other services.36 This translates into lower emissions increases. Cities and states should be able to capture these benefits where possible and apply them to requirements under the Clean Air Act. EPA, working with other federal and state agencies, should coordinate and expand existing pilot projects such as the Clean Air Brownfields Partnership Pilot and the Urban Heat Island Reduction Initiative. Also, methodologies for capturing the benefits of urban redevelopment under the Clean Air Act should be identified and ways to replicate those methodologies determined.

Government, finance, business, foundation, and community- based organizations should periodically convene multisector design teams. to assess the effectiveness of market- based strategies and pilots and identify new innovations. These teams would (1) inventory the capability of existing market systems and instruments; (2) exchange knowledge about potential market incentives that can meet sustainable community goals and objectives; (3) evaluate the benefits of market incentives; and (4) specify new market-based scenarios, mechanisms, and incentives that would advance sustainable community development in metropolitan and rural areas.