Ideas

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Small- and mid-sized cities across the United States are facing similar challenges, including housing affordability, workforce transitions, infrastructure needs, and limited local capacity. Drawing on Community Science’s work with HUD and communities nationwide, this article highlights practical lessons and emerging trends that can help local leaders make informed decisions, strengthen partnerships, and build more resilient communities.

Over the past year, our work with local governments through HUD’s Distressed Cities Technical Assistance (DCTA) program, along with partnerships with foundations, nonprofits, and community organizations across the country, has provided a close look at the opportunities and challenges facing small- and mid-sized cities across the United States.

Although every community has its own history, priorities, and economic and political context, many are confronting the same questions. How do you continue delivering essential services when resources are stretched? How do you attract investment without losing affordability or community character? How do you make informed decisions when staff capacity is limited and data are difficult to access? And how do you prepare residents for an economy that is changing faster than ever, especially with the increased adoption of artificial intelligence?

The encouraging news is that these communities are not standing still. They are building on existing assets and deep histories of collaboration, as they have always had fewer resources than larger communities. They are adapting, experimenting, and finding practical solutions that fit their local context. While every place is different, the patterns emerging across our work offer lessons that many communities can apply. Below are several trends we continue to see.

Being More Strategic

Perhaps the strongest theme we hear from local leaders is that they are being asked to accomplish more with fewer resources.

Communities continue to face rising development costs, evolving federal and state funding and policy priorities, increasing infrastructure demands, workforce shortages, and growing expectations from residents. Local governments are balancing investments in housing, economic development, public services, and community well-being while navigating an increasingly complex funding environment. Rather than waiting for ideal conditions, many communities are becoming more strategic about how they prioritize investments, pursue partnerships, and leverage outside expertise.

For example, several communities have shifted away from pursuing every available grant opportunity and instead are focusing on those that best align with their long-term economic development, housing, or infrastructure priorities. They recognize that preparing a competitive application, administering an award, and meeting reporting requirements all require significant staff time and technical expertise. In many cases, success depends not only on securing funding, but also on having the organizational capacity, strong partnerships, and data needed to implement projects effectively and demonstrate results.

Staying Focused on Community Priorities While Navigating a Changing Policy Environment

Many local leaders have stated how their community priorities have not fundamentally changed in the wake of recent policy and funding shifts from the federal government.

They still want residents to have access to stable housing, quality jobs, healthy neighborhoods, reliable transportation, and essential services. They also want economic opportunity to reach neighborhoods that have historically experienced fewer investments. What has changed is how some communities communicate these priorities in response to evolving policy expectations and funding requirements.

Many communities are sidestepping labels of “equity” and “social justice” by simply emphasizing practical outcomes that resonate across different political perspectives, like stronger local economies, expanded housing choices, workforce development, healthier neighborhoods, and improved quality of life. This shift highlights an important lesson: communities often find common ground when conversations center on shared local goals and measurable results.

Attracting Investment While Preserving Community Identity

Nearly every community we engage with wants to attract new investment. The challenge is ensuring that investment strengthens rather than replaces the community’s identity, its assets, and what makes it unique.

Local officials are working to revitalize downtown business districts, fill vacant storefronts, expand housing options, modernize infrastructure, and increase employment opportunities without sacrificing affordability or historic character and identity. Increasingly, communities are recognizing that attracting the right investment requires more than a compelling vision; it requires credible data, a clear understanding of local assets and market conditions, and a strategic story about where the community is headed.

Earlier this year, Community Science, in partnership with BCT Partners, hosted a HUD webinar on building data-informed Opportunity Zones nomination pitches, demonstrating how publicly available demographic, housing, and economic data can help communities build compelling cases for investment. Strong data alone do not secure funding, but when paired with a clear narrative about community assets and opportunities, they become powerful decision-making tools.

We are also partnering with BCT Partners and HUD to develop trainings that help communities identify practical ways to reduce regulatory barriers to housing development. In many cities, relatively modest improvements—such as creating catalogs of preapproved building plans, streamlining permitting processes, or providing clearer development guidance—can significantly reduce uncertainty for developers while advancing local planning goals. These trainings will take place across the U.S. this coming autumn of 2026 and winter of 2027.

Preserving Older Housing While Expanding Supply

In many communities, housing challenges are not simply about building more units—they are about preserving the homes that already exist.

Older housing stock often requires substantial rehabilitation, making renovation more expensive and time-consuming than new construction. Yet preserving these structures frequently supports neighborhood stability, maintains historic character, and expands housing options.

During our engagement with the City of Rutland, Vermont, for example, local leaders wanted to encourage smaller developers interested in rehabilitation projects rather than large-scale redevelopment. Together, we explored ways to lower barriers by making the renovation process more transparent, highlighting available resources, and creating opportunities for experienced small-scale developers to mentor newer ones. Sometimes building local capacity is just as important as attracting outside investment.

Building Data Capacity to Support Better Decision-Making

One of the most consistent challenges facing small- and mid-sized cities is limited staff capacity, particularly when it comes to collecting, managing, analyzing, and communicating data.

Many communities recognize that better data can strengthen planning efforts, improve grant competitiveness, inform housing strategies, and support economic development. The obstacle is often finding the time, staff, or technical expertise needed to do that work.

That is why Community Science, BCT Partners, and HUD’s DCTA program are developing a Data Governance Cohort to help representatives from small- and mid-sized cities strengthen their ability to access public data, manage local administrative data, and use evidence to support decision-making.
This reflects an approach that has guided much of our work. Whether supporting a regional housing needs assessment in Richland County, Ohio, or helping communities understand local development trends in Westwego, Louisiana, our goal is not simply to deliver an analysis. It is to help communities build the skills and systems they can continue using long after a project ends.

Preparing Today’s Workforce for Tomorrow’s Economy

Communities are also thinking carefully about how technological change—particularly artificial intelligence—is reshaping local labor markets.

While emerging industries offer exciting opportunities, many local leaders are equally concerned about supporting occupations that communities depend on today and will continue to need tomorrow, like construction, utilities, education, childcare, healthcare, home health services, and infrastructure. These sectors remain essential to local economies.

Our work with the W.K. Kellogg Foundation in the U.S. South has reinforced an important lesson: successful workforce strategies balance preparation for future industries with investments in occupations experiencing immediate or near-term demand. This means structuring workforce development strategies around what existing employers need in the near future rather than focusing solely on developing labor market trends. Communities also recognize that workforce development extends beyond technical skills and requires wraparound supports such as transportation, childcare, stipends, financial coaching, and other services that help residents participate successfully in training and employment.

Building More Resilient Communities

Communities are increasingly planning for changing environmental conditions, whether that means strengthening stormwater infrastructure, reducing pressure on local water systems, improving energy resilience, or preparing for more frequent extreme weather events.

Another emerging issue is the growing interest in data center development. For some communities—particularly rural places experiencing long-term population decline and possessing underused land, utility infrastructure, and energy capacity—data centers are being considered as a potential source of new tax revenue and economic activity. At the same time, these projects raise important questions about electricity demand, water use, environmental impacts, land use, and the number and quality of permanent jobs they create relative to their footprint.

Rather than viewing data centers as either an opportunity or a threat, local leaders are increasingly seeking objective information that helps them weigh the long-term economic, environmental, and community impacts against the potential fiscal benefits. As research and practical guidance continue to emerge, we look forward to helping communities evaluate whether—and under what conditions—these investments align with their long-term goals.

Regardless of geography, environmental resilience is becoming part of everyday planning decisions. Communities are recognizing that investments in resilient infrastructure today can reduce future costs while strengthening public safety and long-term economic stability.

Making Community Engagement More Meaningful

Perhaps the most encouraging trend we see is that local leaders increasingly recognize that lasting solutions require meaningful community participation.

Many communities want to move beyond traditional public hearings and find better ways to engage renters, young adults, historically underrepresented residents, neighborhood organizations, and local businesses throughout planning and decision-making processes.

Strong engagement goes beyond collecting public input. It is about building trust, creating ongoing relationships, finding new ways for residents to participate, and ensuring that their knowledge informs and shapes local decisions. These approaches often produce stronger policies because they reflect lived experience alongside technical expertise.

You Do Not Have to Solve These Challenges Alone

If there is one lesson we have learned from working with communities across the country, it is that no city has every answer—and none should be expected to.

Many valuable resources already exist. HUD’s DCTA program, for example, provides customized technical assistance to eligible communities seeking to address housing, economic development, and community revitalization challenges. Eligible communities need only complete a request form, and HUD program officers review each request. State municipal leagues, councils of governments, universities, and regional intermediaries also offer valuable opportunities for peer learning, technical support, and collaboration.

Sometimes the most valuable partner is not one that arrives with a predetermined solution, but one that helps communities ask better questions, analyze evidence, connect with peers, and develop solutions that fit their unique context. At Community Science, we aim to be that kind of thought partner. Beyond our technical assistance and evaluation work for specific funders and initiatives, we also host our free “Ask the Evaluator” webinar series that act as informal sessions, that function much like “office hours,” for small community organizations, local governments, nonprofits, and philanthropic organizations. While each session explores a featured topic, participants are encouraged to bring their own questions, challenges, and ideas. Whether we can offer real-time guidance, point participants toward useful resources, or continue the conversation afterward, our goal is to help communities build the knowledge and confidence to move their work forward.

Small- and mid-sized cities have always demonstrated resilience. Today’s environment may present new complexities, but it also presents opportunities to rethink partnerships, strengthen local capacity, and build communities that are prepared not only for today’s challenges, but for tomorrow’s possibilities.
At Community Science, we believe every community has strengths to build upon. Our role is to help communities identify those strengths, learn from evidence, and develop practical strategies that create lasting local impact. If your community is currently navigating any of the themes or challenges named above, we welcome the opportunity to share what we are learning and explore how evidence, technical assistance, and partnership can help move your work forward.

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Questions the Post Answers:

• What challenges are small- and mid-sized cities facing today?
• How are communities responding to changing federal funding and policy priorities?
• How can local governments attract investment without losing community character?
• Why is data capacity becoming more important for local decision-making?
• What strategies can communities use to preserve existing housing?
• How should communities prepare for workforce changes driven by artificial intelligence?
• What should communities consider when evaluating data center development?
• Why is meaningful community engagement essential for long-term success?
• What technical assistance resources are available to local governments?
• What lessons are emerging from communities across the country?