Few things in contemporary America are more contentious than the question of how to fund new infrastructure and improvements to existing infrastructure. In some communities, taxes and general obligation bonds are used to pay for facilities and improvements that benefit the entire local population. In other areas, new-home buyers assume much of that burden through impact fees and similar assessments that drive up the cost of new housing and make it less affordable for many families. But no matter how today's infrastructure is funded, jurisdictions are always looking for less expensive and more equitable ways to pay for tomorrow's public facilities and amenities.

New report

To help identify innovative ways of meeting the infrastructure needs of the growing U.S. population, the NAHB's new report--"Building for Tomorrow: Innovative Infrastructure Solutions"--focuses on several promising alternatives being explored by communities around the country.

This publication is a must-read for developers, builders, public officials, and concerned citizens who want to investigate cost-effective, innovative strategies that can finance, build, and manage essential infrastructure faster and more economically. The report not only describes innovative approaches to providing infrastructure and the situations where they would be most appropriate, it provides a number of interesting case studies that show how these new approaches already have been used effectively in real-world settings.

Proof positive

In Alabama, GARVEE (grant anticipation revenue vehicle) bonds were used to finance the replacement or repair of 1,300 county bridges, many of which were in such bad shape that it was unsafe for school buses to cross them. GARVEEs are special bonds that states can use for a compelling, short-term need that requires a large amount of capital. They enable the state to borrow against anticipated future federal funds.

In the Boston area, the Massachusetts Highway Department is using a design-build process in which a private company has undertaken a major highway expansion that it expects to complete in half the time it would have taken the state.

In Washington, the school district teamed up with a private, for-profit development group to build a new elementary school and much-needed multifamily housing--all at no cost to the school system.

Chicago has more than 120 tax increment financing (TIF) districts where property taxes are frozen at a baseline level. The difference between the baseline tax assessment and the taxes that would otherwise be assessed on a property is the "tax increment," and the TIF district can borrow against the anticipated increase in property taxes to fund improvements. In addition to generating a total of $6 billion in public and private sector investment, TIF districts have helped Chicago create or retain 60,000 jobs.

Be enterprising

Not all of the ideas presented in the publication will work for every community, and initially there may be challenges associated with these new mechanisms until they gain more widespread application. But for enterprising jurisdictions, successful application of the right infrastructure strategies can yield significant benefits for local governments and residents, while helping to limit costs and ensuring that infrastructure is provided in a more timely and equitable manner.

To read this publication, go to www.nahb.org and enter "Building for Tomorrow" in the search box.

Kent Conine, president, NAHB