This article discusses how small heating reactors offer a safe and economical alternative to fossil fuel for local municipal and institutional district heating. As a replacement for fossil fuel, they reduce the damage due to acid rain and hydrocarbon wastes. The requirements for urban siting and remotely monitored operation lead to design requirements such as slow rates of change in power aided by stabilizing reactivity characteristics, natural circulation and passive decay heat removal, modest performance requirements for shutdown, low fuel ratings and low free fission-product inventories, tolerance to upsets in operation and minimal dependence on people to ensure safe operation.