Anthony Flint is a fellow at the Lincoln Institute of Land Policy, a think tank in Cambridge, Massachusetts. He is the author of Modern Man: The Life of Le Corbusier, Architect of Tomorrow and Wrestling with Moses: How Jane Jacobs Took On New York's Master Builder and Transformed the American City.
Important projects will get off the ground with or without Congress. It'd just be a whole lot easier with them.
In last night's State of the Union address, President Obama once again made that most eat-your-vegetables of admonitions—America's urgent need to invest in infrastructure. Still, the same questions remain: which projects are most deserving, and above all, how should we pay for them?
“Twenty-first century businesses need 21st century infrastructure—modern ports, and stronger bridges, faster trains and the fastest internet,” Obama said. “Democrats and Republicans used to agree on this. So let's set our sights higher than a single oil pipeline. Let's pass a bipartisan infrastructure plan that could create more than thirty times as many jobs per year, and make this country stronger for decades to come.”
In advance of the speech, on Friday, the White House rolled out an initiative designed to enable more infrastructure-focused public-private partnerships for states and metro areas. The Qualified Public Infrastructure Bond program extends financing for airports, transit and ports in addition to roads and bridges. The administration has also scheduled a March infrastructure summit, to further strategize on PPPs and try to attract global investors for U.S. projects.
Infrastructure is the ultimate unsexy topic, notoriously hard to get anybody excited about, despite the regular D+ grade the nation’s infrastructure receives every year (not to mention scary events like collapsing bridges). It does have at least some potential for bipartisan cooperation, but in today’s environment, it's difficult to see much chance of agreement on the details of how we'd pay for it. One thing the president did not mention, for example, was an increase in the gas tax, which has not been hiked or indexed to inflation since 1993, to fund the continually languishing transportation bill.
Nor was there any allusion to another potential source of revenue for infrastructure, by building up funding through so-called repatriation and tweaking the overseas tax code. Maryland Congressman John Delaney’s Infrastructure and Global Tax Competitiveness Act (HR 5857) would make the Highway Trust Fund solvent for six years, and create a new infrastructure fund for state and local governments.
Nobody in Washington appears to be entertaining the idea of an infrastructure bank, a novel idea a decade ago, as it conjures a model similar to Fannie Mae and Freddie Mac. The concept of value capture—financing urban infrastructure by tapping private developers to share a portion of the increase in property values that result from, say, a new transit station—is widely used elsewhere in the world, but only beginning to gain traction in the U.S.
Public-private partnerships and privatization surely will be one important part of the way forward for cities, though experiences like that of Chicago with its parking meters haven’t been inspiring. “Over time, they will become a much bigger piece, but still only a piece,” says Marcia Hale, president of Building America’s Future, the advocacy group co-chaired by former Pennsylvania Governor Ed Rendell, former New York City Mayor Michael Bloomberg, and former U.S. Transportation Secretary Ray LaHood (who, I should note, recently joined the board of the Lincoln Institute, where I am a fellow). “They’re not a substitute for what should be federal involvement. Not everything we need to build has a revenue stream attached to it.”
What's left is being smarter about infrastructure investments, making sure they get the most bang for the buck on a regional basis, and contribute to long-range sustainability and resilience. One of the more promising arrangements is the idea of performance-based infrastructure. (Go ahead, reach for that Peet's about now). California, Oregon, Washington, and British Colombia joined together to form the West Coast Infrastructure Exchange, a sort of kinder, gentler P3 approach, that looks at longer-range outcomes as well as immediate returns.
HUD’s ongoing $1 billion National Disaster Resilience Competition follows a similar philosophy, requiring regions to walk and chew gum at the same time—to recover from disaster by being better prepared for the next one, and achieve multiple goals in resilience and economic development.
One thing that all of this points to is that the days of pork should be over. No more bridges to nowhere, and frankly, repaving long stretches of interstate highway in Vermont or Montana. Spending money more precisely and more wisely requires a cold-eyed and targeted protocol. That's not going to be easy; there is an argument to be made that such projects shouldn't and can't be totally depoliticized.
It was only about 60 words in the State of the Union speech, but the mention of infrastructure has resonance. In the days and hours before Obama was being introduced by the sergeant at arms in the House chamber, metropolitan regions all around the country took steps to build new projects to bolster economies. New York Governor Andrew Cuomo says he wants to build a rail link to LaGuardia airport. Arguably the most convincing U.S. high-speed rail project may occur in Texas, connecting Dallas and Houston, privately financed under the Texas Central Railway Co. and using Japanese bullet train technology. Service is aimed to start by 2021.
China, meanwhile, has taken investing in infrastructure to a whole new level, doubling down on mega-projects including what will be the world’s longest underwater tunnel.
The U.S. won’t be throwing money around at that scale anytime soon, not by a longshot. The standards for performance that are emerging are clearly higher. American cities possess no shortage of good projects; what they will be waiting to see is how capital can flow their way.
They can’t be blamed for pining for the days of the Erie Canal or the Interstate Highway system. Back then, the speeches that leaders made stated the proposition and the urgent need, and soon the check was in the mail. There’s a long list of challenges where this adage applies, from foreign wars to immigration: things were simpler then. But so be it—Washington needs to figure out how to move ahead in a more complex environment. That's why, after all, they all get paid the big bucks.