Compact urban forms drive economic efficiency by maximizing the use of existing infrastructure and minimizing the need for costly expansions. High-density developments enable cities to efficiently allocate resources across public transportation, utilities, and waste management systems, resulting in lower operational and maintenance costs for both governments and residents. Concentrated development also allows for economies of scale—more people utilizing the same infrastructure reduces per capita expenses, making services like water, energy, and transit more affordable.

Compact cities encourage the creation of mixed-use buildings, where residential, commercial, and recreational spaces coexist. This integration not only reduces the need for long commutes but also fosters economic vitality as businesses benefit from being closer to their customer base. Higher population densities translate into more foot traffic and consistent patronage, which can enhance the profitability of local businesses and create a self-sustaining economy.

Additionally, the dynamic and vibrant environments created by compact urban forms attract both investors and talent, fueling further economic growth. These areas often become hubs for innovation, entrepreneurship, and cultural activities, further driving the local economy. By making efficient use of space and resources, compact cities position themselves as attractive destinations for both businesses and residents, paving the way for long-term, sustainable economic prosperity.