Large crane used in the Expressway Construction. Miami-Dade County.

Building for the Future

To succeed economically, the United States needs roads, ports, bridges and airports it can depend on. Our infrastructure supports everything we do. It’s central to not just commercial real estate, but to the entire economy. That’s why improving the country’s infrastructure is a priority issue for NAIOP.

Today, though, our infrastructure simply isn’t doing the job.

Every four years, the American Society of Civil Engineers grades our country’s infrastructure. Last year it earned a D-Plus – a barely passing grade. The report finds crumbling bridges, potholed roads, struggling ports and failing utility systems.

One way to improve our facilities is through federal government incentives that promote the increased use of public-private partnerships. Such “P3s” can provide much-needed infrastructure investment, as well as long-term transportation funding for the maintenance and repair of the nation’s existing infrastructure. These P3s are expected to be a key element of President Donald Trump’s infrastructure plan.

The plan was discussed by Republican leaders during a recent summit at Camp David. It’s thought the plan will call for up to $200 billion in direct federal spending over 10 years. Total spending would be increased to roughly $1 trillion by encouraging investments from states, local governments and private individuals. The plan had been expected this month, but may not be unveiled until after the Jan. 30 State of the Union.

While it is important to leverage private sector investment, it’s also crucial that the federal government guarantee direct investment in necessary projects. That’s because private-sector investment may work well for some projects, such as roads or bridges, but not others. Also, government investment policies should be based on revenue sources that are predictable, reliable and sustainable. That allows local communities to plan projects, and ensures that existing infrastructure is maintained and repaired before it wears out.

NAIOP also believes that teamwork is vital. While developing an infrastructure plan, the federal government should work with states to develop strategies that encourage development of warehouses and other distribution facilities along trade corridors to meet future growth demands.

Also, the federal government can help by reducing the red tape that often blocks development. Unduly burdensome federal regulations can cause projects to be delayed or even grind to a halt, and that discourages private investors from committing their money. The federal government should establish clear, easy-to-follow national rules, and provide states with added regulatory and administrative flexibility on local infrastructure projects that get federal funds. State and local leaders, after all, have a better sense of what projects are necessary, and are also invested in protecting the safety and security of their back yards.

In addition, greater coordination between the various federal agencies that have a say in approving major infrastructure projects is a must. Duplicative and overlapping requirements add to costs and project delays without discernible benefit. In this area, the Trump administration has been aggressive, announcing that major infrastructure projects will have one government agency responsible for spearheading the project through the federal regulatory maze.

Majority Leader Mitch McConnell is hinting the Senate may not be willing or able to pass a full 2018 federal budget, and that the level of partisanship in a midterm election year may preclude action on major legislative initiatives. Nevertheless, infrastructure generates substantial bipartisan support. Enough Democrats and Republicans agree that rebuilding our nation’s infrastructure is so critical to our nation’s economic well-being that the possibility for agreement on a bipartisan plan cannot be discounted.

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