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KEEP OUR EYES ON THE BULL’S EYE; NOT THE BULL

Posted by Content Coordinator on Thursday, June 11th, 2009

Claude Shostal, past President of Regional Plan Association, is a member of the faculty at the NYU Schack Institute of Real Estate.

As we watch our 401 accounts struggle to reach half of what they once were or, worse, watch the weeks of eligibility for unemployment benefits dwindle, it may help to contemplate the few silver linings to our recent economic woes. One is surely the emerging national consensus and conversation over the importance of investing in our infrastructure.

This wonky, unsexy word, “infrastructure,” usually cannot be found in the national policy discussion. These days, it is prominent and being linked to that very sexy and provocative word: stimulus. It could be a powerful combination if we do not allow politics as usual to govern how we put this combination to work.

Normally, to get a new spending plan through our legislative bodies, there has to be something in it for everyone. As much for the rural areas as for the cities; as much for the small states as the big ones. We are seeing this played out again in the debate over the funding crisis for the New York Metropolitan Transit Authority. To avoid major fare increases, service cutbacks and deferred maintenance, a sound financing plan was advanced by a special Commission appointed by Governor Paterson (”Ravitch Commission”) to avoid the disinvestment that marked the decline of the system (and the City) in the 1970’s.

Parochial interest mainly from Brooklyn and Queens, whose residents benefit most from good quality transit service, have scrapped the Ravitch plan. To get some sort of patchwork plan through, upstate legislators have made clear that they want equal money for bridges and roads. This may make political sense, but it does not make economic sense.

The same kind of division is beginning to emerge in the national debate over how to spend stimulus money on infrastructure. The country faces a unique opportunity to make massive, strategic investments in our infrastructure that would not even be considered in “normal times” and that could retool the true building blocks of the national economy for decades, even generations to come. But parochialism demanding money for bridges to nowhere and turning byways into highways could well squander this golden opportunity.

Research that has been done at the Schack Institute of Real Estate has demonstrated how the productivity, value added and income of New York City workers, and even more dramatically Manhattan employees, dwarf those of the rest of the region. On a national scale, Regional Plan Association, in its America 2050 Report, documents how the 11 emerging Megaregions in the country are responsible for the lion’s share of economic growth and activity. Investing infrastructure stimulus monies in these areas would have infinitely more positive and productive impact for far longer on far more people than spreading the money around everywhere. This may not sound politically correct, but it certainly makes economic development sense.

It will take unique courage and wisdom to escape the political conventional wisdom but these may just be the times for such action. I’ll have a lot more to say about the details of sound infrastructure investment priorities. But for now, pay attention to those who are talking about the bull’s eye, not the bull.

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