Where Will Infrastructure Spending Have the Most Impact?
Last month, President Trump gave his first State of the Union Address. In it, he renewed his talk of a massive infrastructure bill to improve the nation’s roads and bridges. Using a strategy of private-public partnerships, if this bill comes to fruition, it could have a big impact on some the states with the worst infrastructure in the country while providing huge opportunities for CRE investors.
America’s Infrastructure is in Bad Shape
It’s no secret that America’s infrastructure is failing and has been for decades. In 2009 there was some money put into a stimulus package for infrastructure but not nearly enough to tackle the estimated $2 trillion worth of needed infrastructure repairs and upgrades across the country. Since that time, nothing much has changed.
The American Society of Civil Engineers keeps track of and periodically produces a report on the status of the country’s infrastructure. Prior to last March, the previous report from 2013 graded the U.S. infrastructure a D+. Four years later and not one road, bridge, dam, railway, airport, or school received an A. In fact, only one area graded above a D+ and that’s America’s railways which received a B.
While there have been efforts over the last several years to produce an infrastructure bill, Congress has been at a standstill on most spending bills for nearly a decade. But if the bill is written and makes its way through Congress and to the President’s desk, it will be sorely needed. If no changes are made, the ASCE predicts that crumbling infrastructure could cost the economy close to $4 trillion by 2025.
Northeast Could See the Biggest Impact from Infrastructure Spending
Clearly every state would be impacted by new infrastructure spending; however, no area is worse off than the northeast in terms of crumbling infrastructure. Along with grading America’s framework, the ASCE also ranks the states with the worst infrastructure.
Out of the top 10, 7 of the states are in the northeastern corridor. From waste management to levees and ports, most of the structures that support everyday life in America are failing but none more than roads which coupled with airports ranked the poorest of all infrastructure assets.
Rhode Island ranked worst among all 50 states with more than 70% of the state’s roads and bridges in poor or mediocre condition. New Hampshire is second worst, also because of its dilapidated roads and congested highways.
Both Maine and Connecticut suffer from deficits among their bridges and roads and New Jersey takes the 5th spot among the states with the worst infrastructure. Right behind New Jersey is the State of New York followed by West Virginia, Maryland, and Massachusetts and Mississippi tying for the 10th worst.
Some states have already begun forming their own public-private partnerships as is the case in New York. Having suffered through Hurricane Sandy where recovery is still underway several years later, New Jersey would perhaps see the biggest impact from a new infrastructure spending bill.