The American Institute of Architects (AIA) semi-annual Consensus Construction Forecast projects an 11% decline in design and construction activity in 2009. To revitalize the building sector, which accounts for about one in every 10 dollars of the U.S. GDP, the AIA developed the Rebuild and Renew Plan, which details its recommendations for the allocation of funds in President-elect Obama’s economic recovery plan. The AIA is calling on the new administration and Congress to create policies that ensure these monies are spent on the planning, design and construction of energy efficient, sustainable buildings and healthy communities that are advantageous for both the environment and economy. If implemented correctly, the nearly $100 billion plan would create 1.6 million jobs throughout the design and construction industry.
Recent reports estimate that the economic recovery package may total as much as $800 billion, with at least $350 billion dedicated to infrastructure projects. However, the AIA’s recommendations call for longer planning and design periods for projects to help ensure that they are carried out in the most effective, cost-efficient manner and that funds are not poorly spent due to the projects being hastily planned and executed. Providing funding for projects across 24 months will ensure a steady stream of funds for job creation over the likely life of the recession.
“President-elect Obama’s economic recovery package provides us with the opportunity to leave a lasting imprint on our built environment with projects that improve the safety of the existing infrastructure and increase energy efficiency, so long as these projects are undertaken with the utmost attention to smart design and planning,” said Christine McEntee, executive vice president and CEO of the AIA. “The Rebuild and Renew plan has garnered significant interest from the transition team and key Congressional leaders, and outlines initiatives to build better, safer and healthier communities while creating jobs and stimulating economic growth nationwide that can lead to long-term economic vitality.”
The plan is comprised of five key policy areas for immediate attention: 21st century schools; green commercial, residential and institutional buildings; historic preservation projects; transit, mixed use development and complete streets projects; and tax relief for businesses. Highlights from the plan include:
21st Century Schools: As the costs of energy and construction materials continue to increase and budgets get tighter, education agencies are further delaying or canceling major projects to repair and modernize school buildings. The AIA is calling for the federal government to invest $25 billion in districts across the country to repair, modernize and green school buildings. Additionally, it is proposing $700 million for pilot programs that would provide grants for the development of model school campuses that support 21st century teaching and learning in each region of the country. This proposal would create more than 445,000 jobs across the industry.
Green Buildings: The current economic crisis presents an opportunity to build better public, residential and commercial architectural designs. This requires investing in the types of full-scale retrofits that can significantly reduce a building’s carbon footprint. The AIA is calling for the federal government to provide $30 billion for energy efficiency upgrades and modernization for federal, state and local public buildings; residential, commercial, industrial and healthcare facilities; and green affordable housing. Appropriating these funds would result in the creation of 430,000 jobs. In addition, the AIA is calling for increasing the size of the energy efficient commercial buildings tax deduction from $1.80 per square foot to $3.00 per square foot and this recommendation was just endorsed by the Environment America Research & Policy Center.
Transit and Livable Communities: A lack of investment in our infrastructure system since the New Deal has limited economic growth and jeopardized the safety of American citizens. As Congress prepares to create legislation that stimulates the economy the AIA believes that it is important to invest at least $12 billion for transit facilities and operations, since they greatly enhance the economic development, sustainability, safety and livability of communities. Funding for transit-oriented projects will create compact, walkable communities that mix housing, retail, office space and other amenities around high quality train systems and create approximately 375,000 jobs for the building and construction industry.
Historic Preservation Projects: The preservation of historic buildings already in the development phase will create more work for the building industry and generate positive economic returns in the communities surrounding them. The plan calls for the appropriation of at least $30 million to the underfunded Save America’s Treasure program for bricks-and-mortar preservation projects. The plan also calls for another $100 million in grants to be provided through the State Historic Preservation Officers and Tribal Historic Preservation Officers for non-federal public and nonprofit historic sites.
Tax Relief for Businesses: By accelerating the depreciation of energy efficient heating, ventilation, air conditioning, or commercial refrigeration property installed in non-residential property or residential rental property, businesses of all sizes would be able to improve their operations, reduce costs, and reduce energy consumption. The AIA is also calling for elimination of a requirement that businesses that perform government work have 3% of their payments withheld.
After showing signs of stabilization over the last three months, the Architecture Billings Index (ABI) plunged nearly five points in June. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to 12 month lag time between architecture billings and construction spending.
About FM Alert
