Such is the thinking behind a policy released late last month by the Environmental Protection Agency that instructs states to adopt smart-growth principles in allocating the $3.3 billion in water infrastructure funding that the federal government doles out each year. States, it asserts, should prioritize projects that upgrade the drinking water and wastewater infrastructure in cities over projects intended to serve new developments on the suburban fringe.

The new guidance arguably arrives five years too late -- after a home building boom that swallowed up vast swaths of land. But building will eventually resume, and EPA officials say the leverage of the federal funding -- the Clean Water and Drinking Water State Revolving Fund -- could coax states toward a more sustainable form of development. With so many cities contending with aging water pipes and sewer lines, officials say, it makes most sense to address those needs first............read more