Those are but some of the interesting findings contained within a new report entitled Infrastructure 2014: Shaping the Competitive City released earlier this month by the Urban Land Institute (ULI).
Based on a January survey of 241 public sector officials and 202 senior-level real estate executives – such as developers, investors, lenders and advisors – based in large and mid-sized cities across the globe, with concentrations in the U.S., Europe and Asia Pacific, the ULI’s report shows that good roads and bridges, reliable and affordable energy, plus strong telecommunications systems (including high-speed internet capability) are key drivers of real estate investment.
Among the combined group of public and private sector participants, 88% rated infrastructure quality as the top influencer of real estate investment and development, though public leaders rated it their top factor (91%) while it came in second among private sector developers (86%) behind consumer demand (90%).
Patrick Phillips (seen at right), ULI’s CEO, noted in the report that this poll highlights the “critical role” infrastructure plays in guiding real estate activity and economic development, while reinforcing the need for close coordination between land use planning and infrastructure planning.
“This survey indicates a growing awareness among the public and private sector of the importance of investments in a variety of transportation systems, including ‘active’ transportation that offers an alternative to constant car use,” he pointed out.
“We have entered a new era that requires new approaches to funding and building infrastructure to support the creation of communities that are healthier, more livable, economically prosperous, and environmentally sustainable,” Phillips added.
Some other key findings from the survey include:
- Public transit led the list of infrastructure investment priorities with 78% of those polled saying public transit systems, including bus and rail, should receive top priority for infrastructure improvements followed by roads and bridges (71%) and pedestrian facilities (63%).
- Investment priority rankings tended to be the inverse of quality perceptions, with only 48% of survey respondents ranking public transit as “good” or “very good” in quality, and 51% saying sidewalks and pedestrian facilities were good or very good.
- Roads and bridges received modest quality marks, with 60% of respondents rating them good or very good. By contrast, 90% of respondents said health care facilities were good or very good, placing these facilities at the top of the quality list.
Three-quarters of the respondents identified cooperation between developers and local governments as the most significant funding approach for new infrastructure, ULI added, with other strategies requiring collaboration between real estate and civic leaders – including “value capture” and “negotiated exactions” – also at the top the list of likely infrastructure funding sources.
However, despite the high ratings for these strategies, ULI’s report noted that they are limited in their ability to fund infrastructure at a systematic level, and they are not effective in all contexts. All funding strategies offered in the survey—including contributions from federal and state governments—received relatively strong responses, suggesting the need for a range of funding options.
ULI’s poll also revealed skepticism among the respondents about the level of preparation by local governments regarding the long-term operations and maintenance of infrastructure.
Overall, 30% of survey respondents said that long -term operations and maintenance are usually neglected, with 72% noting that operations and maintenance are considered only some of the time or not at all. ULI’s survey found that U.S. private sector respondents in the main were much more pessimistic about this than public sector leaders, with those from outside the U.S. having a more positive view than those in the U.S.
All in all, this report is another piece of data showing that the need for solid infrastructure – especially where roads and bridges are concerned – remains a critical factor in the future development plans for urban centers around the world. Yet finding the money to pay for such infrastructure investments – both in terms of expanding it and maintaining it – remains the real trick.
