As recovery from the current deep recession begins, creating strategies for reinvesting in the world’s urban areas—where half the planet’s population lives—will require an understanding of development options. In their role as economic engines, successful cities, metropolitan areas, and emerging megaregions will be at the cutting edge of economic transformation, programmed to respond to changes in the makeup of the 21st century.

Cities have yet to hit the lowest point of their revenue and expenditure numbers from the current recession. Now is the time to rethink which primary land uses they should attract and expand, which they should demolish, and what their role should be in shaping future development. Some cities will shrink, and that may be fine. Others, especially in Asia, will grow, and the challenge there will be to keep them livable.

Successful models for handling growth are predicated at the layout stage, where planning and infrastructure are implemented before buildings are built—where zoning allows for more mixed-use development, strong mass transit, a balanced jobs-to-housing ratio, and amenities and a high quality of life at the street level. The new developer will be one who takes an integrated approach to create high-quality places capable of attracting capital, talent, and innovation. Increasingly, especially in the United States, universities and hospitals are becoming important developers, using their capital to institutionalize real estate.

How cities shape the built environment has an enormous effect on climate. In the next five to ten years, the development community will be required to meet stringent targets for greenhouse gas emissions. The Obama administration’s executive order on sustainability and greenhouse gases is an imperative first step to create a market mechanism that sends a message about carbon emissions. The U.S. Department of Housing and Urban Development, the Department of Transportation, and the Environmental Protection Agency are working together to coordinate funding, programs, and activities for sustainable development. California is aiming to reduce its greenhouse gas emissions by 15 percent from current levels and 30 percent from projected 2020 levels. The U.K. is mandating an 80 percent emission reduction from 1990 levels, and intends all new housing to be net-zero carbon by 2016. With China and India now on board, the shift to a low-carbon economy in time will alter everything, especially the form of communities and how people move from place to place.

To demonstrate real-world design and development techniques, the Clinton Climate Initiative is helping provide business, financial, and technical expertise to support creation of carbon-negative communities that offset more than 100 percent of their carbon emissions and actually remove carbon from the atmosphere. The initiative has 16 development projects around the world that, when completed, will house more than 3 million people in climate-positive communities.

As the ability to develop planning, design, and technological innovations to reduce the climate impact of cities becomes more critical, in the near term we can expect to see increased densities in center cities, as well as at transit centers and neighborhood business districts; building codes that accommodate green innovations; an increase in the recycling of waste; utilities operating with zero greenhouse gas emissions; the emergence of electric charging stations; expansion of mass transit; extensive bus rapid-transit networks; more mobility strategies like bike sharing; and congestion pricing and peak-period parking charges.

As the world becomes more urban, how these environments are conceived, designed, and built will offer new opportunities to explore land use paradigms and business strategies that will have a defining impact on our planet.