Better stormwater management through green infrastructure can have many benefits. Many different studies have documented multiple and quantifiable costs and benefits across a range of social, economic, and environmental improvements. Water-related benefits can include reduced stormwater runoff resulting from successful infiltration practices, increased groundwater recharge, reduced downstream flooding and pollutant loading, and reduced combined sewer overflows. Green infrastructure can also reduce energy use and the urban heat island effect when practices such as green roofs and tree planting are used. Air quality benefits can be realized through increased vegetative practices like bioretention, planting trees, and use of green roofs. Finally, community benefits including enhanced aesthetics, higher land values, and reduced noise pollution can be achieved through green infrastructure.
Investing in green infrastructure can cost-effectively help communities manage stormwater while also providing increased climate resilience, opportunities for community recreation, and enhancing community aesthetics. Designing green infrastructure programs to maximize these benefits can open up funding sources that would otherwise not be available for stormwater management projects or programs. Communities can use funds for programs such as transportation and street design, open space and wildlife conservation, or disaster relief to pay for green infrastructure programs. Communities can aggregate multiple funding and revenue sources or combine a funding source with financing options such as low-interest loans or green bonds.
Green infrastructure projects may be funded by federal programs that support efforts to reduce water pollution and manage stormwater.
1. Environmental Protection Agency (EPA)
EPA green infrastructure funding programs include the Section 319 Nonpoint Source Program, the National Estuary Program (NEP) and the Urban Waters Small Grants Program (UWSG). Under Section 319 (of the Clean Water Act), EPA provides grant funding to states to reduce pollution from stormwater runoff and other sources; EPA recognizes the “importance of green infrastructure … in managing stormwater” has made clear that funds can be used for green infrastructure projects. Found in Section 320 of the Clean Water Act, the NEP goal is to protect and restore water quality of the 28 estuaries and associated watersheds designated by legislation and EPA as being of national significance. EPA provides grant funding to the NEPs to implement their Coastal Conservation Management Plans (CCMP). Virtually all the NEPs have identified stormwater as a major stressor leading to water quality problems and habitat losses and can provide grants or other funding and project support for local green infrastructure efforts, municipal training, and assistance in developing finance tools. EPA’s UWSG Program focuses on improving the quality of urban waters and stimulating neighborhood revitalization in underserved communities and can be used specifically for innovative or new green infrastructure practices.
2. Housing and Urban Development (HUD)
Community development money can be used to fund green infrastructure because these projects can create jobs, increase economic activity, and increase property values. Urban tree planting can increase economic activity in a commercial district. Green infrastructure can increase property values by mitigating flooding and improving neighborhood aesthetics. As a result, green infrastructure can be funded using Community Development Block Grant (CDBG) program funding.
The Community Development Block Grant—Disaster Recovery (CDBG-DR) program also provides federal aid to states post-disaster, and funds can be used for a variety of community development activities that benefit low- and moderate-income individuals, reduce blight, or address an urgent community need. In rehabilitating housing and constructing public amenities, cities may be able to incorporate green infrastructure techniques (like street trees and permeable pavements) in street design.
3. Federal Emergency Management Agency (FEMA)
The FEMA Hazard Mitigation Grant Program (HMGP) provides post-disaster federal aid to states to mitigate the risks of future disasters and can fund flood mitigation projects, including acquisition and relocation of flood-prone properties and soil stabilization projects like the installation of vegetative buffer strips.
4. U.S. Department of Transportation (DOT)
Green infrastructure projects are often eligible for transportation funding because they improve transportation networks by efficiently and cost-effectively mitigating street and alley flooding. The DOT’s Transportation Alternatives Program (TAP) provides funding for “transportation alternatives,” including “off-road trail facilities for pedestrians, bicyclists, and other non-motorized forms of transportation.” TAP funding could be used to pay for green infrastructure components of trails and sidewalks such as permeable pavement.
Green infrastructure projects may be funded by several state programs that support efforts to reduce water pollution and manage stormwater.
5. Clean Water State Revolving Fund (CWSRF)
The CWSRF provides low-interest loans to cities that are generally have a repayment period of up to 30 years, and interest rates below market rates, generally from zero to 1.5 percent. A variety of water infrastructure projects—water quality, wastewater, and storm water—are eligible, as are nonpoint source projects on public property and any project identified in an approved CCMP under the National Estuary Program. The CWSRF can fund the capital costs of water quality improvement as well as retrofit projects. Most green projects and all stormwater projects are eligible for funding. Similarly, the Drinking Water SRF provides funding for development of a utility or related capital projects and to acquire land for source water protection.
Green infrastructure projects may also be funded by local governments.
6. Stormwater Utility Fees
Local governments may choose to assess stormwater utility fees as a reliable means of paying for green infrastructure programs. This approach is advantageous because it provides a dedicated funding stream with sustainable and predictable revenue over time. A stormwater utility fee may be seen as a more equitable way to pay for stormwater management, compared to general funds, because local governments or utilities may be able to raise money in a way that is directly related to a property’s stormwater impacts. However, establishing utility fees may face regulatory and legal limitations, including sometimes approval of a legislative body. An entity (local or regional government or utility) that decides to establish a stormwater user fee must first determine its legal authority to do so and must structure the user fee in a way that meets all applicable state legal requirements. State law sets the parameters for what types of local or regional entities are allowed to establish fees or taxes, and local governments must be extremely clear that they meet their own states’ definition. While these requirements vary by state, they can include procedural questions (e.g., whether a vote by the local elected body or the voters is necessary) and substantive questions (e.g., whether the fee is structured in such a way as to fairly relate to the amount of impervious surface on a particular property).
Through effective outreach, local governments may be able to establish strong community support for stormwater user fees. The City of Orlando, Florida, funds its stormwater management activities through a stormwater utility fee, and successfully built public support for fee implementation by linking the fee to citizens’ concerns about flooding and clean waterbodies.
7. Permit Fees
Local governments can assess permit fees to provide additional revenue for green infrastructure programs. The fees allow local governments to raise revenue directly from any proposed development or construction that might worsen stormwater impacts. However, assessed fees may not provide sufficient funding for full program implementation, and likely would need to be combined with additional funding sources. Additionally, fees may not be a consistent source of revenue, as they may decrease during a time of slow construction.
8. Green Bonds
Green bonds are an emerging, promising mechanism by which local governments can fund climate resilience and other environmentally focused projects. Green bonds are not significantly different in structure than bonds used for other purposes but are used to finance environmentally beneficial activities. Because green bonds must be used for environmentally beneficial projects, they may attract the interest of investors interested in environmental issues, as well as traditional investors. This increased interest may in the future reduce borrowing costs (compared to traditional bonds) for governments raising funds through bond issuance.
Overall, there are multiple potential avenues for funding a green infrastructure project. Working with an informed, experienced funding expert can help you make your next green infrastructure project a reality.