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Study Finds New Ways to Provide for Infrastructure

To download the report, NAHB members can click here.

“It is encouraging to note that more and more state and local governments are using innovative strategies to finance, build and manage much-needed infrastructure,” said NAHB President Kent Conine.

“Through these innovations, they are making the most of their communities’ resources,” he said. “Some forward-thinking jurisdictions are using one or more of these innovative mechanisms to help get infrastructure built more quickly and less expensively.”

At a general assembly of the National Association of Counties in Milwaukee last month, Conine discussed collaborative efforts between NAHB and that group to help meet the need for expanded infrastructure at a time when governments are facing difficult financial challenges.

As an example of what local governments can do, he cited the decision of Alabama to use GARVEE (Grant Anticipation Revenue Vehicles) bonds to finance the replacement or repair of 1,300 county bridges, many of which were in such bad shape that it was unsafe for school buses to cross them.

The special bonds were authorized by the state legislature and approved by the state’s voters in November 2000.

GARVEE’s are special bonds that are used by states for a compelling, short-term need that requires a large amount of capital. They enable the state to borrow against anticipated future federal funds.

NAHB’s new report provides case studies on innovative approaches to providing infrastructure and explains the conditions under which various approaches are best suited.

Reports from those case studies will appear in future issues of this publication. Examples of where innovations are scoring success include:

• The Boston area, where the Massachusetts Highway Department is using a design-build process in which a private company has undertaken a major highway expansion that it will complete in half the time it would have taken the state
• Washington, D.C., where the school district teamed up with a private, for-profit development group to build a new elementary school and much-needed multifamily housing, all at no cost to the schools

“Not all of these ideas will work for every community, and initially there may be challenges associated with these new mechanisms until they gain more widespread application,” Conine cautioned.

“But for enterprising jurisdictions, successful application of the right infrastructure strategies can yield significant benefits for local governments and their citizens,” he said.

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