Some researchers in Taiwan argue that the current mechanism by which government subsidies are allocated for smart city demonstration projects warrants improvement. A comprehensive literature review determined that the development potential of smart cities should be prioritized in site selection for such demonstration projects. This study developed an evaluation framework on the basis of multi-criteria evaluation methods to enable the identification of suitable smart community demonstration sites. Evaluation criteria were first identified through the Delphi method. Next, the weights of each criterion were derived through the analytic hierarchy process. Furthermore, the capability of the proposed evaluation model was determined through simulation testing.