The Role of Construction in the Nation’s Recovery
- Jul 21, 2011
When in the fall of 2008 I first decided to run for the national office of president of the American Institute of Architects (AIA), there were already signs that the design and construction industry was headed for a problem. Nearly three years later, the bad news keeps coming. However, what I heard at a recent meeting in Chicago of the Clinton Global Initiative (CGI) strongly suggests that, despite current fears, we’re not headed for a double-dip recession. And money is available in certain sectors for construction. Getting access is the problem.
For readers not familiar with the initiative, the mission of the CGI is “to inspire, connect, and empower a community of global leaders to forge solutions to the world’s most pressing challenges.” Certainly the current economic climate is a global challenge, and since the United States is the world’s economic powerhouse, it’s not surprising that the meeting in Chicago focused for the first time solely on innovative ideas for spurring job creation and economic growth on these shores.
AIA was invited to participate for a very obvious reason: This country’s design and construction industry currently accounts for one of every nine dollars of U.S. Gross Domestic Product, according to the U.S. Census Bureau. Each $1 million in new construction spending supports 28.5 full-time, year-round-equivalent jobs, according to a study by George Mason University economist Stephen J. Fuller.
And we accepted the invitation because we saw this as an opportunity to expand the network of alliances the AIA has created on issues of concern to the architectural community, policy makers and the public. It was also a chance for those of us in the private sector to focus on action and commitment in the face of the political polarization that has led to gridlock in Washington.
It was in Chicago that Treasury Secretary Geithner said we are not headed for another bout of recession. That was the good news. The not-so-good news is that as a nation we do not yet have a comprehensive plan on how to create jobs and be more competitive. Something along the lines of the WPA with its focus on job creation has so far been beyond our reach.
Yes, I heard the broad outlines of such a plan. We all recognized the role of education in regaining our edge and that innovation in the energy sector, particularly in the built environment, would have a positive impact on our nation’s balance of payments, security and the matter of climate change. However, the federal government is short on money and no consensus exists that would lead to a national effort in such critical areas as, for example, infrastructure.
Although most state and local governments, like Washington, are strapped for cash, participants heard again and again that the private sector has money to lend. But given the financial squeeze of the last three years, those who do have the funds are understandably gun-shy. The challenge for the design and construction industry is to make the case for investment.
In the go-go years of the housing boom, there was little incentive to market. No more. One of the messages I took away from Chicago is that not only do architects have to find what projects might be funded; we have to be part of the effort that puts all the players together in public-private partnerships. We have to be among the rainmakers who make things happen.
For our part, the AIA announced an initiative to develop and make available to potential investors a database of stalled building projects nationwide that make economic sense but that lack the financing to be completed. We will analyze and categorize the identified projects by various factors, including building type, location (including those locations with a strong, skilled workforce), new construction versus retrofit, and impact on sustainability and livability goals. We’ll then work to identify opportunities for collaboration and financing to help move projects forward.
With banks reluctant or unwilling to lend, those of us in the private sector must take the initiative. The CGI is a unique platform for sharing ideas, which is itself an innovation because we do not always share. The networking that came out of Chicago is a resource the AIA will actively engage in to help create jobs in our industry and make the U.S. a leader in a global recovery.
Clark D. Manus, FAIA, is president of the American Institute of Architects and CEO of San Francisco-based architecture and urban design firm Heller Manus Architects. For more information, visit www.hellermanus.com.