With cities facing unprecedented population growth as more people flock into urban centers in search of better opportunities and America managing only a sluggish recovery, how can we improve existing infrastructure to provide clean drinking water, create livable neighborhoods and help safeguard people’s health and the environment?

Faced with the spectre of budget cuts and Europe economy mired in debt crisis, many cities are facing tough investment decisions. Their populations are growing at a time when their revenues are shrinking. These new realities have led people to ask some searching questions. How clean is the water supply? And how can we increase the vitality and competitiveness of urban environments with solutions that optimize the entire city?

Replacing existing “gray” infrastructure with green infrastructure seems like a rare bright spot for equity investors and city managers. This involves supplementing or substituting “gray” infrastructure including pipes, filters, and concrete with cost-effective, sustainable and environmentally friendly natural alternatives.

The U.S. Environmental Protection Agency (EPA) recently announced $950,000 funding for expanding green infrastructure projects across 16 states. The funding awarded to 17 diverse communities across the nation will be invested in improving water quality, and building livable and healthier neighborhoods.

In a statement, EPA said the “funding is intended to increase incorporation of green infrastructure into stormwater management programs, protect water quality, and provide community benefits including job creation and neighborhood revitalization.”

Green infrastructure employs a number of natural solutions to address permitting requirements, capture and filter pollutants, and minimize seasonal flooding. For example, rain gardens, rain barrels, green spaces, vegetated curb extensions, porous pavement, greenways, and even urban reforestation projects reduce stormwater pollution and ‘urban wet weather’ issues including combined sewer overflows, end-of-the-pipe discharges and stormwater runoff.

According to the statement, both small towns such as Beaufort in South Carolina and large cities, such as Pittsburgh, Pennsylvania will benefit from the funds. It is expected that green infrastructure investment will result in other co-benefits such as increased property values, and attractive neighborhoods that stimulate further economic and environmental benefits. Copper’s Ferry Partnership in Camden, New Jersey is one of the communities that will receive funding to quantify the benefits of green infrastructure and assess local codes and ordinances.

Why invest in alternative natural solutions? Cities have always invested in successful natural alternative solutions. A classic example is the New York City watershed, one of the most regulated and successful water systems in the nation. The city deployed a number of strategies including purchasing properties around the watershed area from willing sellers, implementing watershed rules and regulations, and establishing watershed protection and community partnership programs. These measures have paid off by providing an alternative natural solution for controlling turbidity and managing water quality. As a result, this cost-effective natural alternative has saved ratepayers billions of dollars in avoided filtration costs.

Still, given the rising infrastructure capital needs, targeted public policy strategies such as private sector investment including off-balance sheet financing, performance contracting, land-secured backing and public private partnerships are needed to compliment the funding gap. The EPA’s green infrastructure agenda released in April 2011, the “Strategic Agenda to Protect Waters and Build More Livable Communities through Green Infrastructure,” recognizes community partnerships as a key strategy for accelerating green infrastructure development.

The case for increased targeted investment in green infrastructure especially in stormwater management is compelling. By investing in alternative natural solutions, cities can create green jobs, reduce overheads and still build revitalized neighborhoods, and remain sustainable in the face of unprecedented competing interests. Only then can we truly achieve a step change in the way we increase competitiveness and vitality of our cities as spaces for innovation.

This article first appeared in Examiner