The American Institute of Architects (AIA) announced it would make available to potential investors a database of stalled building projects nationwide that make economic sense but which lack the financing to be completed. AIA announced this commitment as a participating member at Clinton Global Initiative (CGI) America, the first conference of the CGI solely dedicated to economic issues impacting the United States. The database should be available in coming months.
“We are committing to developing this database not just with the fortunes of architects in mind,” said AIA President Clark Manus, FAIA. “In large part, the fortunes of the entire U.S. economy rest on the jobs creating potential of the design and construction industry, which accounts for $1 in $9 of U.S. Gross Domestic Product, according to the U.S. Census Bureau.
“For months, our industry has continued to suffer solely because banks won’t lend,” Manus said. “With this innovative, unprecedented commitment, the AIA has decided to step up and do something about that.”
The AIA commitment comes as the design and construction industry is plagued by a continuing dearth of credit for otherwise credit-worthy projects. Almost two-thirds of architects responding to a recent AIA survey reported at least one project that is stalled due to lack of financing, despite record low interest rates.
Of the 63% of firms surveyed with stalled projects, the average value of each stalled project was almost $50 million per firm. To make matters worse, the AIA’s May Architecture Billing Index (ABI) report, which provides a nine-to-12-month glimpse into the future of nonresidential construction spending activity, shows a continued deterioration in business conditions. The May ABI score was 47.2, a decrease from a reading of 47.6 in April. One factor cited in the continued decline is the chronic lack of financing.
In order to build and analyze the database of stalled projects, the AIA will establish a new survey that will begin to identify and analyze stalled projects from around the country that could be moved forward on almost any front but for the lack of financing. The commitment by the AIA involves soliciting information about stalled projects around the country from its members and allied professionals.
The AIA will then analyze and categorize the identified projects by various factors, including building type location (including those locations with a strong, skilled workforce), new construction versus retrofit, and impact on sustainability and livability goals. The AIA will work to identify opportunities for collaboration and financing to help move projects forward.
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