The Infrastructure Investment and Jobs Act—Half a billion Dollars in “Smart City” Investments

Included within a “research and innovation” chapter of the recently-passed Infrastructure Investment and Jobs Act is $500 million in grant funding for smart city projects through the Strengthening Mobility and Revolutionizing Transportation (SMART) program. The program allocates $100 million in funding per year over five years for projects that increase the connectivity of US cities, including through use of autonomous vehicles, smart traffic signals, smart energy grids, data-based logistics, and similar sensors-based infrastructure projects. This funding has the potential to accelerate cities’ capacity to harness the significant environmental and other benefits that digital technology integration can provide to municipal systems.

Cross-cutting Benefits of Smart City Projects

Increasing the connectivity of municipal systems offers the potential for substantial benefits across a variety of areas. For example, increased data collection and improved response to live data has the potential to transform city transportation systems. Currently, traffic congestion in major cities results in increased fuel costs, lost productive time, decreased local air quality, and increased greenhouse gas emissions. In 2019, Americans suffered a combined $88 billion in productivity time losses, with the average American driver spending 99 hours in traffic congestion each year.

A connected urban transportation network can address these issues through multiple pathways. Smart traffic lights can use live traffic monitoring to dynamically adjust vehicle flow based on traffic demand. Applications which direct drivers to available parking spaces can reduce the amount of drivers circling city blocks in search of parking, which accounts for up to 30% of traffic in downtown areas. Autonomous vehicles can reduce congestion by using smoother acceleration, cruise control, and braking than human drivers, and can eventually be connected to city-wide smart traffic control systems to further improve efficiency. And providing consumers with increased data on alternative transportation methods, such as live public transit departure times or bicycle and scooter locations, can encourage residents to utilize these transport options.

These digital transportation solutions don’t just save city residents time and money—they benefit the climate as well. Smart traffic signals are estimated to be able to reduce greenhouse gas emissions by 20%, while autonomous vehicles could account for an additional 20-30% reduction.

And while the SMART grant program focuses on city transportation systems, this is just one of several areas in which cities could use digital technology to increase efficiency to the benefit of the environment. Smart buildings, smart energy grids, data-based waste management, improvements in emergency response communications, precision water management systems, and many other municipal functions can be improved with digital technologies and data integration.

Which cities receive funding will be a major question of the SMART program. With such significant funding at stake, city applicants are expected to be numerous, but the IIJA provides some guidance to the DOT in allocating funding across cities. No more than $40 million in any year may go to large communities of greater than 400,000 residents, while no more than $30 million each may go to midsize and rural communities. Further, DOT is to prioritize applications which are easily scalable, feature open sharing of data, and encourage adoption of smart city technologies across communities, among other factors.

In addition to benefiting city governments and residents, this funding will allow smart technology companies to showcase their products.

Arnold & Porter will continue to monitor how this program is rolled out. 

© Arnold & Porter Kaye Scholer LLP 2022 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.