While much of President Joe Biden’s housing agenda is within the proposed $1.75 trillion Build Back Better bill working its way through Congress, members of the multifamily and commercial real estate industry still found plenty to like in the $1.2 trillion bipartisan infrastructure package approved late last week.
“This infrastructure bill will repair and upgrade the nation’s roads, bridges, mass transit, high-speed rail, broadband, power grid, water pipes, electric vehicle charging stations and other critical infrastructure,” Real Estate Roundtable President & CEO Jeffrey DeBoer said in a prepared statement. “We applaud this investment in our nation’s future and look forward to the jobs, communities and progress it will support.”
“The real estate industry has long been committed to more equitable communities, sustainable buildings and an ambitious vision for infrastructure,” John Fish, Real Estate Roundtable chair and chairman & CEO of Suffolk Construction Co., added in prepared remarks.
Officially known as the Infrastructure Investment and Jobs Act, Biden called the legislation a “once-in-a-generation bipartisan infrastructure bill that will create millions of jobs, turn the climate crisis into an opportunity and put us on a path to win the economic competition for the 21st century.”
The bill was approved by the U.S. Senate in August but stalled in the House of Representatives until Friday as the progressive caucus of the Democratic Party sought to tie it directly to Biden’s much larger “human” infrastructure bill with spending on social issues, as well as climate change and green energy. That bill could get a vote in Congress as soon as next week. Known as the Build Back Better bill, it contains at least $150 billion for affordable housing and could include $65 billion to for public housing repairs, $25 billion for rental assistance and $15 for the Housing Trust Fund.
“I think the affordable housing world is going to clearly see the benefits and I think all commercial real estate of all kinds is going to benefit from the different parts in these two bills,” said Barry LePatner, veteran real estate and construction attorney & principal of LePatner & Associates LLP.
LePatner said the spending to be allocated in the infrastructure bill is critical at this point in the United States because the country is going to grow to 400 million people by 2060. The vast amount of that growth of is going to be in the South and Southwest as it has been for the past decade and still needs to be built out, LePatner said.
“Historically, improvements the U.S. has made for better roads, bridges and public transportation has always provided better access to not only existing communities but in creating new communities,” he told Multi-Housing News.
Some of the key spending measures in the Infrastructure Investment and Jobs Act include:
- $110 billion for roads, bridges and major infrastructure projects
- $73 billion to upgrade the electrical grid
- $66 billion for passenger and freight rail
- $65 billion for broadband investments
- $55 for water and wastewater quality, including $15 billion to replace lead pipes
- $39 for public transit
- $21 for environmental cleanup
- $50 billion for climate resiliency and impacts of floods, wildfires and other climate-related events
- $7.5 billion for a network of electric vehicle charging stations.
Economist Hugh F. Kelly said the way the money is divided in the bill matches up well with the scores for each element from the American Society of Civil Engineers as to where the most work is needed.
“I’m glad to see there’s going to be spending on broadband because that is going to be a big deal for households, whether they are owner households or (residents), to get information and interact with the economy,” Kelly said.
Cindy Chetti, senior vice president of government affairs at the National Multifamily Housing Council, agreed the $65 billion earmarked for broadband expansion was good because it would increase access across the country and would also help low-income families with internet payments by providing about $30 a month.
While some of that money would go toward expansions in rural areas, Daryl Carter, chairman & CEO of Avanath Capital Management, said weak broadband access created a problem with an entry gate for a San Francisco community that relied on a WiFi signal for operation. He said they had to amend the technology for the gate to work around the slower broadband in the area.
Carter, whose firm is developing a combined senior and traditional multifamily community with a total of 180 units in his hometown of Detroit, said an antiquated sewer and storm system has become a significant issue in the city. He said modernizing the system and increasing capacity is crucial for Avanath’s development as well other projects in Detroit. Carter also pointed to the problem with lead in the water delivery system in parts of Michigan, most notably in Flint, but said it’s a problem encountered in a lot of places where Avanath develops because they can be in older parts of a community or inner cities where there are older infrastructure and pipes.
Carter and Gidi Cohen, CEO of CGI + Real Estate Investment Strategies, which invests in ground-up developments and income-producing real estate throughout California, New York and the Southeastern and Southwestern U.S., both pointed to the planned investments in electric vehicle charging stations as a positive for the multifamily industry. Carter, whose company invests in affordable and workforce properties across the U.S., said his firm is looking at various electric vehicle charging options. Cohen said CGI Strategies has already begun installing EV charging stalls at both new and existing properties in its portfolio.
“There is definitely demand by the (residents) and we want to accommodate that as well as help save the environment,” Cohen told MHN.
Chetti agreed and noted many NMHC members are also making their own investments in electric vehicle charging stations and a nationwide focus on increasing public access would “make people more comfortable with purchasing electric vehicles.”
Kelly and others pointed to the investments to be made in upgrading the electric grid and also in making power grids and other infrastructure more resilient to climate change impacts. They cited the power disruption in Texas earlier this year during a cold snap, rolling blackouts in California due to wildfires or the recent hurricane in Northern New Jersey and New York City that killed several people in flooded homes.
“A lack of previous investment in infrastructure is directly impacting the multifamily sector,” Kelly said.
Chetti said reliable power is a necessity, particularly as we move toward a renewable energy system.
“Putting money toward that is ultimately helpful toward the industry,” she said.
Bob Pinnegar, president & CEO of the National Apartment Association, said infrastructure and housing are intrinsically linked.
“By building back our nation’s critical services, the apartment industry can operate more efficiently and we can help ensure that Americans have easier access to the types of housing in the place they want to live,” Pinnegar said in a prepared statement.