It’s a no-brainer that infrastructure is a big consideration in how and where people invest their real estate dollars. But what the recent report put out by the Urban Land Institute and EY showed is that there are more forms of funding options than just public private partnerships, or P3s, that people view as significant.
Venture capital strategies came in second place behind P3s but it was followed by four other funding sources with a dead heat of support – negotiated exactions; user charges and fees; contributions from federal/national governments; and contributions from state/provincial governments. Not very far behind those four was “income or property taxes.” Perhaps more telling was that all funding mechanisms were viewed as significant by more than 50% of respondents.
The report, called “Infrastructure 2014,” was based on responses from 241 public and private sector government and private organizations as well as 202 private investors, lenders, and developers.
There were disconnects between what respondents viewed as top priorities and their views of the current quality of those infrastructure items. For example, 58% thought improving telecommunications infrastructure should be a top priority but 84% rated telecommunications quality as very good or good. When it came to passenger connections, 58% thought those should be priorities but 70% thought the quality of the existing passenger connections were already good.
Respondents generally thought infrastructure is not handled well in terms of operations and maintenance over the long term. Thirty percent said operations and maintenance costs are usually neglected, 42% said they were neglected some of the time and only 25% thought they were integrated in decision making.
Survey respondents felt these five items were high impact trends and issues:
- How willing the public is to pay for infrastructure projects
- Increasing demand for compact, walkable development
- Families with children choosing to live in their cities or areas
- Cost and availability of energy
- Use of innovative infrastructure pricing
Overall the report claims that jurisdictions need to do a better job at communicating the value of infrastructure to the public, learn joint development skills and make sure the long term funding is available to sustain investments in infrastructure. You can see the whole report right here.
The Urban Land Institute is a nonprofit research and education organization whose mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide.
EY is a global leader in assurance, tax, transaction, and advisory services.