Principles to guide infrastructure investment for the future

How have your finances been lately?

I imagine that the pandemic and this recent period of unprecedented inflation impacted your bank account in some not so positive ways. The recent state of the economy has also seriously impacted how governments and developers handle their finances when it comes to constructing and maintaining the built environment.

According to the Association of General Contractors 2023 Construction Outlook Survey, 77 percent of construction contractors experienced projects being canceled or postponed by owners in 2022-2023, primarily due to rising costs (48 percent). And their most significant concerns for 2023 include economic slowdown/recession (74 percent), material costs (73 percent), lack of labor force (70 percent), and rising interest rates (67 percent). So, it should suffice to say that the volatile market has had a significant impact on what happens with our infrastructure.

But first, let me take a step back and explain what I mean by infrastructure. According to the Oxford Learner’s Dictionary, infrastructure is defined as:

The basic systems and services that are necessary for a country or an organization to run smoothly

For this article, I’ll focus on physical infrastructure like buildings, roads, bridges, etc.

As Americans, we are blessed to have plenty of infrastructure that enables us to live comfortable, fulfilling lives without thinking twice about where we get our power from or how easily we can access clean water. Although we experience wonderful benefits, recent findings have highlighted a looming problem. The American Society of Civil Engineers (ASCE) has issued multiple “report cards” over the last couple of decades, grading the state of our infrastructure based on the performance and capacity of existing public works on an A-F scale. Where do you think America’s average score over 17 different types of infrastructure stands?

A solid C-.

This most recent grade from 2021 is the first time ASCE has graded it above a D.

Their website with the history of infrastructure report cards summarizes the conclusion of the most recent study well:

Our nation’s infrastructure is aging, underperforming, and in need of sustained care and action.

They estimate that nearly $6 trillion of investment in infrastructure is needed over the next ten years. Federal, state, and local governments have begun allocating more resources towards infrastructure, headlined by the Investment in Infrastructure and Jobs Act (IIJA), which adds $1.2 trillion towards the cause.

So, problem solved, right? We have issues, and we’re spending lots of money to solve them. Well, it’s not quite so simple. As an engineering consultant focusing on economics and project delivery in the built environment, I’ve worked on dozens of projects worth billions of dollars. Based on my experience, I’d like to share three principles that should guide investment in infrastructure for sustained success.

1. Set Clear Goals & Expectations

While we’ve generally defined the purpose of infrastructure, it is important to define the specific purpose for each system or asset to understand whether it is achieving its intended goals.

Take a road, for example. Goals for this type of infrastructure could include:

• Move people between point A and point B as fast as possible,
• Move as many people between point A and point B as possible,
• Ensure complete safety by eliminating all injuries and deaths and/or
• Facilitate active transportation to improve the health and happiness of users and residents in the area.

A road will look very different depending on the importance and priorities to achieve each of these or other goals. A highway, whose goal is to move cars quickly across long distances, has a much different purpose and, therefore, design compared to a local road in a residential neighborhood, whose goals range from facilitating multimodal transportation to shared public space among neighbors.

Governments and owners need to first have a clear vision for what their expectations are for their city, state, or country. Then they can use different kinds of infrastructure to help them achieve that vision by choosing the appropriate “tool” from the toolbox. Placing importance on and prioritizing goals is one of the biggest infrastructure challenges, especially in a public industry where governments and owners are responsible to countless stakeholders. Synergies and win-wins are difficult and complicated to produce but sorely needed in this generation.

2. Reduce Costs

One of the biggest challenges with infrastructure projects is to accomplish the most good while spending the least amount of money. That’s always been hard, especially over the last few years. Do you think I enjoy telling clients that a project will cost way more than they initially thought it would? Heck no. But as a consultant, it is my responsibility to present the most accurate estimate we can produce with the given parameters and designs. That’s why it’s best to evaluate the costs early so that goals can be re-evaluated, considering the marginal cost it would take to achieve each. Level-setting expectations can then allow owners and engineers to consider areas where they can reduce costs throughout the process instead of scrapping significant parts of the scope towards the end to fit the project within the budget. 

This process should not just focus on the initial construction but on the overall life cycle cost for the project. It’s much less sexy than the renderings of that nice new highway, bridge, stadium, park, or skyscraper. But it is critically important to understand how this infrastructure will be maintained for the next 50, 100, 200 years.

Suburban sprawl is facing the problem of long-term maintenance, since many homes, in conjunction with the roads and utilities to support them, were built en masse beginning around the 1950s. We are currently hitting the 60-year expected life expectancy for much of this infrastructure and are now faced with a difficult question—how will we go about repairing it? Strong Towns has been a leading voice on this issue, emphasizing the importance of local fiscal responsibility to ​​safe, livable, and financially resilient cities, particularly in suburban towns.

Resiliency has become an increasingly prevalent topic over (at least) the past decade. Building more robust infrastructure to withstand future environmental stresses may be better in the long run than building lighter infrastructure and having to pay more for maintenance and repairs down the line.

I supported the development of a cost-benefit analysis for a Climate Resilience Plan developed for the Wharf District Council in Boston. We estimated that it would cost around $1.2 billion over the next 47 years to construct the proposed resilient infrastructure that could result in $3.9 billion in avoided losses from future storm events. Although spending a lot upfront doesn’t initially sound appealing, this analysis suggests that the potential net savings of more than two billion dollars make it a much more attractive alternative than simply doing business as usual. 

3. Increase funding

When all else fails, you can look for more money. That’s why the pressure became so great that we needed bipartisan buy-in to sign off on trillions of federal dollars to be directed toward infrastructure. We built beyond our means and are now required to make massive investments on top of existing budgets for maintenance and repair.

Before we spend these dollars, it’s essential to explore ways we can reduce how much we shell out on infrastructure by building less but building it to achieve the intended goals more efficiently. This represents a more efficient route to build back better before resorting to increasing taxes or going deeper into debt. There are also many creative ways to raise additional funds if they’re truly needed, ranging from public-private partnerships to tax-increment financing.

Beyond funding in general, another critical question to ask is: who are the people who will be building and maintaining our infrastructure? There’s a significant shortage of construction workers relative to the planned work in the pipeline, somewhere in the ballpark of half a million, according to the Associated Builders and Contractors. Pointed investment in recruiting and training more laborers, as well as utilizing emerging technologies to improve productivity, could be crucial for long-term success.

Conclusion

When you see news about the infrastructure around us, remember your personal budget: how would you wisely spend your resources of time and money? We should have a clear vision and goals to guide us, reduce costs where necessary, and strategically increase our income as needed. Although there are many concerns on the horizon for our planet and the built environment, these are some of the principles that should guide how we invest in the world around us for our future.

Note: This article first appeared in the ENU Newsletter, a newsletter written by Emerging New Urbanist members about topics and debates within the movement. Subscribe to the newsletter.