The newly released LEED for Neighborhood Development (LEED-ND) will be used to score the location efficiency of HUD grant applications, HUD Secretary Shaun Donovan announced last week.

LEED-ND, which launched in April as the benchmark for healthy green communities, integrates green building into community development, with the goal of reducing sprawl, increasing transportation choices, decreasing automobile dependence, and encouraging healthy living. The housing agency will apply this criteria to submissions in its upcoming Sustainable Communities Planning Grants and other programs, totaling $3.25 billion in available grant funds.

“It’s time that federal dollars stopped encouraging sprawl and started lowering the barriers to the kind of sustainable development our country needs and our communities want,” Donovan said.

The imperative for sustainable communities is made even more urgent in this economy, he added, as housing and transportation are the two biggest expenses for families, constituting for more than 50% of the average American household budget.

“The housing and economic crisis has reaffirmed the need for federal leadership in this area,” said Donovan, who drew a correlation between foreclosure rates and access to transportation, good schools, and economic opportunity.

Jennifer Goodman is Senior Editor, Online for EcoHome.