New year, same city challenges. In 2025, urban leaders will continue to face problems of rising homelessness and housing costs, climate change-driven disasters, transit agency financial woes and traffic deaths. But local governments continue to experiment with emerging technologies and pioneering policies that show potential for addressing these and other persistent urban problems.
Local leaders are expecting less support from the incoming Trump administration for many of their priorities, as federal funding and policies are likely to see dramatic shifts. President-elect Donald Trump is expected to prioritize tax cuts and deregulation and has threatened to rescind all unspent Inflation Reduction Act funds and lead a mass deportation of immigrants. Experts also expect the Trump administration to cut support for public transportation in favor of roads and rural areas.
Here are six trends the Smart Cities Dive team will be watching in the year to come. Which trends shaping U.S. cities are you following in 2025? Let us know at [email protected].
New approaches to building decarbonization
The push to get buildings off fossil fuels has strong momentum, with cities’ building performance standards kicking in and more communities experimenting with neighborhood-scale approaches to building decarbonization.
Hurdles remain, however. Numerous states have recently passed laws preempting municipalities from restricting natural gas use and infrastructure. Plus, legal challenges to local building electrification laws ramped up after a federal appeals court deemed in 2023 that Berkeley, California’s first-in-the-nation ban on gas hookups in new construction violated federal law. That prompted some local and state governments to begin working on what Building Decarbonization Coalition Founder and Executive Director Panama Bartholomy called “building codes 2.0”: rules that effectively restrict natural gas use in buildings but that can pass legal muster in light of the Berkeley decision.
Funding streams for building decarbonization projects could also soon become harder to come by as Biden administration-era programs come to an end.
“The climate agenda of many cities will be stifled by the disappearance of federal funding streams,” Joan Fitzgerald, a Northeastern University professor of public policy and urban affairs, said in an email. The upside, she said, is that the environmental organizations that support cities and states may see an uptick in donations, as they did under the first Trump administration.
Pedestrian and bicycle deaths decline, but not enough
While traffic deaths involving pedestrians and bicyclists decreased in the first half of 2024, they remain above levels seen over much of the past decade.
The federal government stepped up its efforts to combat deaths and injuries suffered by vulnerable road users in 2022 with the U.S. Department of Transportation’s National Roadway Safety Strategy. DOT has also updated federal regulations governing traffic signs, signals and other roadway markings; provided funding for pedestrian safety improvements and proposed a requirement that new passenger vehicles be designed to reduce the risk of serious and fatal injuries to pedestrians in collisions.
That focus is likely to change under the Trump administration, however. Trump’s previous administration focused federal grants more on rural transportation and roads than on pedestrian and cyclist issues, according to the Urban Institute’s Yonah Freemark, principal research associate and research director, Land Use Lab at Urban.
“Our roads remain incredibly dangerous for people outside of a motor vehicle,” said Adam Snider, director of communications at the Governors Highway Safety Association. A December AAA Foundation for Traffic Safety report pointed to speeding, distracted driving and aggressive driving leading to tens of thousands of lives lost each year. An online survey conducted by the AAA Foundation revealed that while drivers recognize these behaviors as unsafe, they admitted to doing them anyway.
“We have to do more of everything that works — like fair traffic enforcement, infrastructure improvements and vehicle technology — to make it safer for people on foot and two wheels," Snider said.
The housing crisis spurs more reform and innovation
The affordable housing crisis looms large over many U.S. cities. A record number of renters nationwide are spending at least 30% of their income on rent, and the median home price-to-income ratio is at an all-time high. The number of people experiencing homelessness is on the rise and recently hit a record high, according to the federal government’s January 2024 point-in-time count report released last month.
Many cities are making changes intended to increase the affordable housing supply. Cities from New York to Cincinnati enacted major zoning reforms in 2024 to increase allowable housing density, lift parking requirements and more. Local efforts to spur office-to-residential conversions are ongoing, and some cities, like Seattle, have recently eased restrictions on “co-living” housing with private bedrooms but shared kitchens and other facilities.
To tackle homelessness, some communities are re-housing people directly from encampments, National Alliance to End Homelessness CEO Ann Oliva said in an email. One of the biggest challenges facing local governments this year will be how the federal government funds homelessness and housing assistance programs, Oliva said. “Should the Trump administration advance carceral approaches to homeless response, it will have a significant effect on cities,” she said. “Most directly, it will pressure local law enforcement to shift tactics away from other priorities.”
Intercity bus travel continues to grow
In 2023, scheduled intercity bus lines like Greyhound, FlixBus and Megabus carried about 50 million passengers, achieving a 90% recovery from pre-pandemic levels.
“There has been an impressive frequency buildup in major corridors, particularly outside the Northeast,” said Joseph Schwieterman, director of the Chaddick Institute for Metropolitan Development at DePaul University, in an email. Routes between Austin and Dallas, Texas; Dallas and Houston; Los Angeles and Las Vegas; and Miami and Orlando, Florida, are seeing demand exceeding pre-pandemic volumes, Schwieterman said.
Routes that serve major airports, such as Boston Logan International Airport, Chicago O'Hare International Airport and Miami International Airport, also “are doing quite well,” according to Schwieterman.
Some states support bus service with the help of federal grants for rural transportation. Both Virginia and Maine added bus routes in 2024, and Massachusetts is considering bus service as one of several options to improve transportation in the state’s northern tier.
There have been some setbacks for the industry, including the bankruptcy in 2024 of MegaBus owner Coach USA and the loss of bus stations in several communities. But Flix North America CEO Kai Boysan remains bullish on the future of intercity bus service. In an August 2024 interview, Boysan said that “Bus travel is affordable, accessible and connects many destinations. The future is really bright for long-distance bus travel.”
Cities gain confidence on AI
While artificial intelligence has been around for decades, the release of publicly accessible generative AI applications in recent years has sparked efforts by cities to explore how such technologies can transform local government.
Cities are wading carefully into these unknown waters. Is their caution going overboard? “Cities are over-indexing on ethics, rules, and governance,” James Anderson, who leads Bloomberg Philanthropies’ Government Innovation program, said in an email. “It's a bit of the cart before the horse, and it's certainly stifling innovation.”
Innovation-focused networking programs are motivating mayors and their chief innovation and data officers to focus on the opportunities, creating a helpful “fear of missing out” on the benefits of AI, Anderson said. “My sense is 2025 will be the year cities push well beyond the helpful administrative applications we've seen to date, and start generating real breakthroughs on services, policy, and resident impact,” he said.
Although cities are increasingly willing to test new technologies, Bloomberg Associates Principal Adam Freed said that questions remain around how they plan to scale successful pilots into permanent programs. He commended cities like New York for switching to challenge-based procurement, in which the city identifies a problem it wants to solve and asks companies to pitch solutions. “It takes the onus off the cities to go out there and be researchers,” Freed said. “They are never going to be at the cutting edge of knowing what technology is out there. It's just not what cities are made to do.”
Growing choices for people to get around their cities
City residents and visitors now have more options to get from A to B than ever before. But for city leaders, the means of travel is not always the priority: “What cities care about is, can we move the person where they need to go?” said Brittney Kohler, legislative director of transportation and infrastructure services at the National League of Cities.
Cities have “made significant strides” in providing multi-modal options to connect trips, allowing travelers to, for example, take a shared e-bike to a transit station and continue on a bus or train from there. “That trip is becoming much more logical to the average user,” she said.
But the process of launching new modes of transportation and new technologies has not always gone smoothly. Safely integrating bikes and scooters into the existing streetscape can be challenging because most U.S. cities are built around the automobile, Kohler said. “That leads to some inherent conflicts.”
In the coming year, Kohler also expects to see “some interesting moves in the autonomous vehicle space.” That includes robotaxis, which have been involved in accidents and inappropriate driving maneuvers.
States are limited in their authority to regulate autonomous vehicles, she explained. Kohler is looking to the U.S. Transportation Department to establish a pilot program balancing safety and technological development. It would give the federal government “the authority to quickly stop it if unsafe practices were discovered but also to quickly advance more operations.”
