Will Mackintosh, Associate Professor of History at the University of Mary Washington and Chair of the Economic Development Authority for the City of Fredericksburg
The year is 2030, and the City of Fredericksburg is almost a decade into its commitment to carbon neutrality. It has required a lot of hard work to rethink the city’s assumptions about how it should grow and thrive, but the good news is that the city’s economy has been meaningfully strengthened by the transition. Some of this economic strength is driven by factors that are part of the broader national and international green transition, but the majority of it derives from Fredericksburg’s unique existing advantages that have allowed it to thrive in a post-carbon world.
Global Green Transition and Employment
In 2030, the global transition to a green economy has already produced 24 million new jobs, largely in the construction, energy, transportation, agriculture, and recycling sectors. It has also eliminated 6 million jobs, largely in the fossil fuel industry. While this change has been wrenching for some regions, it has benefited Fredericksburg’s economy, which has seen its local construction and transportation sectors thrive, and which has been largely unaffected by the decline in fossil fuels. The city’s increasing energy independence has returned significant sums to taxpayers’ pockets, as both public and private utility costs have plunged now that citizens aren’t individually or collectively purchasing their energy from distant fossil fuel conglomerates.
The City of Fredericksburg has been able to harness this global engine of growth for local prosperity because of some forward-thinking decisions made by City Council earlier in the decade. Council updated the city’s building codes to require all new construction to be wired for solar panels and electric car chargers. They similarly banned natural gas in all new construction, since it is a fuel source that cannot be made carbon neutral. They passed ordinances enabling the installation of both public and private electric car charging stations throughout the city, and they worked with the Architectural Review Board to adopt standards that would allow the owners of historic properties to install green energy technology in historically sensitive ways. They used creative financing mechanisms to cover every single city-owned property with solar panels and to transition the city’s entire vehicle fleet to electric vehicles. These policy changes in the early 2020s sparked an investment boom in the city’s public infrastructure and housing stock that has repaid itself many times over through the multiplier effect on local spending and through widespread energy savings.
Densification and the Turn to Urban Living
In the early 21st century, 26% of all U.S. energy consumption was dedicated to transportation. In 2030, the transition the green economy has accelerated a longstanding American trend towards increasing urbanization, as individuals and companies have sought to minimize the time and energy spent on transportation. This embrace of dense urban living, and the desire to minimize commute times and energy spent on transportation, is most prominent among the youngest Americans, who increasingly seek the convenience, vitality, and amenities of city life. Although historically a small city by both national and statewide standards, Fredericksburg is blessed with an intact dense urban core; strong (and improving!) rail connections to the broader region; an ideal location between DC and Richmond; and ample room for urban growth in Small Area 1. By 2030, it has become clear that movement towards a carbon-neutral future means that a growing percentage of Americans will choose less energy-intensive urban lifestyles, and Fredericksburg has been uniquely well suited to benefit from this demographic trend.
These benefits have taken several forms. The growth in Fredericksburg’s workforce and the broader desire to reduce commuting has led regional employers to open offices in the city and to allow more teleworking. As recently as 2019, Fredericksburg’s outcommuting rate had been 42.2%, but by 2030 that number has dropped considerably as more Fredericksburgers find employment opportunities closer to home. Keeping those workers in the city during the day has been beneficial to restaurants and retailers in Fredericksburg’s walkable urban neighborhoods, since local workers are more likely to spend their salaries at local and neighborhood businesses. Fredericksburg’s workforce has also gotten younger and better educated, since 25 to 34-year-olds with college degrees are the demographic that is driving the growth in the kind of dense, walkable urban neighborhoods that Fredericksburg increasingly offers. This beneficial change in Fredericksburg’s labor market has further attracted employers looking to take advantage of that concentration of talent, and it has also increased the rate of new business formation within the city, since that demographic is also the most likely to be starting the successful firms of tomorrow. The city’s economy has gotten more vibrant, more creative, and more entrepreneurial as it has become denser. It has also become more efficient; the network effects of population size and density means that cities are more economically productive than less dense areas. While Fredericksburg will never be DC or Richmond, its historic ability to offer the benefits and amenities of urban living at a more manageable and family-friendly size has made Fredericksburg a uniquely appealing destination for both employers and employees.
Understanding that growth and densification are both good environmental policy and good economic policy, City Council undertook a considered pro-growth strategy in the 2020s. They authorized Accessory Dwelling Units throughout the city to provide and affordable and environmentally-sustainable housing option for people looking to live in smaller spaces. They relegalized the construction of small apartment buildings throughout the city, restoring the city’s longstanding historic mix of single-family housing and multifamily housing. They radically reimagined the city’s transportation infrastructure by prioritizing bikes, pedestrians, and public transportation over private automobiles, to enable the walkable urban neighborhoods that drive economic growth and to ensure that the city’s historic infrastructure could easily support its population growth. They undertook a major partnership with the Economic Development Authority to aggressively implement the Small Area 1 plan, which created vital and economically productive urban neighborhoods where there used to be an unsustainable ocean of parking and minimum-wage retail jobs. Between the beloved historic “old town” and the gleaming offices and apartment buildings of “new town,” Fredericksburg’s economy is both more productive and less carbon intensive.
Impact on the City Budget
Embracing the possibility of an economically vital green future meant that City Council had to take some bold budgetary actions in the 2020s, but by 2030, they have paid off in spades, and the City’s budget has never been in better shape. Putting Fredericksburg on a path towards carbon-neutral growth has meant making some significant investments in green energy technology, in new sustainable transportation infrastructure, and new parks and schools to support the city’s growing population. It also meant making some brave policy choices, like mandating green energy for new construction, that temporarily increased the cost of building in the growing city. But the City budget for 2030 looks completely different from the City budget of a decade ago. The City’s energy costs have declined radically, freeing up significant revenue streams for other uses. The investment in the city’s infrastructure and the growth in its population has increased property values in the city, and therefore increased property tax yields, but the growth of multifamily housing means that those property taxes are paid by a larger body of residents so the property tax burden has actually decreased per capita. New employers contribute significantly to the City’s budget through the Business, Professional and Occupational License (BPOL) tax, which has allowed the City to lower the rate for all businesses. Meals and ticket tax revenues have jumped as more residents spend their money inside the city. The continued growth of online retail has further benefited the city, because they City’s portion of the sales tax on those online sales has grown in proportion to its population rather than its retail base. The costs to maintain the city’s infrastructure have increased, but with all the new residents, the City is better able to support its independent police force, court system, and school district as they unlock economies of scale. Although the new infrastructure needs of the city had looked daunting in the early 2020s, the growth in tax revenue driven by the new population has made them easier, not harder to afford.
