Bonds supported by tax credits provide an excellent tool for urban infill, brownfields and extensive water resource protection. Federally supported bonds would help state and local governments finance the costs of open space and water resource protection and brownfields remediation. Comparable to other programs such as the successful Low Income Housing Trust Credit and Qualified Zone Academy Bonds, communities could issue environmental bonds by pledging federal tax credits in lieu of interest payments. State and local governments facing rapid expansion of population and urban boundaries need to freeze the costs of land protection while increased revenue from growth creates the means to pay. Environmental bonds backed by federal tax credits will allow land values to be locked in at present prices while minimizing carrying costs.
Tax credits are an excellent method of leveraging outcomes.
The availability of tax credits will create a market for both institutional and private investors looking for secure, income-producing opportunities. There is a pent-up demand for new tools and techniques to help communities deal with the pressures and problems of growth and with the challenges of land and water restoration. The most immediate and obvious solution is to authorize a program of bonds backed by tax credits limited to financing open space and land and water remediation. As with the Florida experience, growth and protection can proceed on parallel paths.