Streetsblog Capitol Hill

Despite brought support for the concept of a National Infrastructure Bank (NIB) to help pay for major improvements to America's built environment, including transportation, significant uncertainty still surrounds the questions of how the bank would work as well as what it would fund. 

As Streetsblog Capitol Hill has reported, the House transportation committee took a different approach to the NIB than sponsors of a recently invigorated NIB push spearheaded by Rep. Rosa DeLauro (D-CT) and Sen. Chris Dodd (D-CT).

In its six-year, $500 billion federal transport bill, the House panel proposed to house an NIB within the U.S. DOT, while DeLauro's NIB plan would set up an independent bank with its own directors and a strict set of criteria by which to evaluate proposed projects.

Now that the Obama administration has advanced the idea further by pitching a $4 billion National Infrastructure Innovation and Finance Fund in its 2011 budget, momentum for passage would seem to be growing. But as DeLauro pointed out Tuesday during a hearing with White House budget chief Peter Orszag, the president's Fund looks more like the House transport committee's vision than her own.

DeLauro tossed a number of salient questions at Orszag:

How much private capital do you anticipate the fund will leverage? And how many jobs do you think can be created with the fund? Is the $4 billion request for 2011 a one-time request, or does the administration propose this is an ongoing annual funding level? If the fund is located in the Department of Transportation, with a board composed of senior DOT officials and other federal agency representatives reporting to the transportation secretary, how do we expect or how can we expect it to be an objective, independent entity?

The Connecticut lawmaker also questioned why the White House would limit its Infrastructure Fund to transportation when water quality, energy, telecom and other elements of the built environment all tie into the way the nation gets around.

"The basic goal here is to [build] on the success that we have had with the TIGER grants program," Orszag told her, leaving the door open for an expansion into other types of projects.

Still, it's far from clear that such an expansion would be feasible if the White House's Infrastructure Fund were to become a part of the internal U.S. DOT structure. And limiting the independence of such a fund could leave it open to political concerns, particularly if senior members of Congress attempt to sway its decision-making process in an earmark-like style.

And the physical location of an NIB is not the only question mark left unanswered. Read more...

When President Obama signed an executive order in October requiring federal agencies to craft strategies for reducing their greenhouse gas emissions, he described the mandate as Washington "lead[ing] by example" on the pollution-reduction front.

And that's true -- but the order also includes language telling federal agencies to get involved in integrating local transportation planning, with a particular focus on selecting sites for government facilities

that are pedestrian-friendly, near existing employment centers, and accessible to public transit, and emphasize existing central cities and, in rural communities, existing or planned town centers;

The overall goal for government agencies, as Obama's order put it, should be to "strengthen the vitality and livability of the communities in which federal facilities are located." Given that more than 2,200 communities host federally owned or leased property, that edict could unleash a lot of local energy for transit and pedestrian improvements.

The order also gives federal agencies eight months to craft long-term sustainability plans focusing on how to implement "strategies and accommodations for transit, travel, training, and conferencing that actively support lower-carbon commuting and travel by agency staff." The White House budget office and Council on Environmental Quality are charged with vetting each agency's proposal.

And as each agency devises those emissions-cutting plans, the Obama administration's push to consider sustainability as a transportation, housing, and environmental issue is given a meaty role in the process.

Read more...

(ed. note. Please welcome contributor Chris Bradford, author of the economics blog Austin Contrarian.)

As this recent Congressional Budget Office (CBO) report reminds us, the answer is "very regressive."

The disparity between the federal government’s support for homeowners and renters is stark. In fiscal year 2009, according to CBO, Washington spent almost four times as much money ($230 billion) to support homeownership as it did to improve rental affordability ($60 billion).

That spending on homeowners included $80 billion for the tax deduction for  mortgage interest, $16 billion for the state and local property-tax deduction and $16 billion for the capital-gains exclusion.

But it also included temporary commitments, such as the Obama administration's mortgage modification program ($75 billion) and the first-time home buyer tax credit ($14 billion). And let's not forget the continuing federal outlays to subsidize Fannie Mae and Freddie Mac’s credit activities ($43 billion). 

By contrast, Washington devoted just $60 billion to improving rental affordability, mainly through a combination of low-income housing tax credits, Section 8 rental assistance, and public housing.   

Most people, I think, will acknowledge a general uneasiness with this disparity. It seems unfair for the government to spend 80 percent of its housing budget on the 67 percent of its households who own property.

What's more, these federal subsidies flow disproportionately to the most affluent of those households. Homeowners see no benefit from the mortgage interest, property tax or capital-gains deductions unless they itemize -- which means that many homeowners get little or no actual subsidy. The subsidy rises with the value of the home and the tax bracket of the buyer.

In other words, the federal government handsomely rewards the affluent for buying expensive homes and leaves renters (as well as low-income home owners) relatively worse off in the process.

But Washington's housing subsidies, which have continued under both Democratic and Republican administrations, have an even more insidious impact in the nation's most expensive markets. There, they make renters worse off in absolute terms by raising the overall cost of housing.

How does this happen? While federal homeowner subsidies nominally flow to home buyers, the actual beneficiaries depend on the particular housing market.

In markets where it is easy to add new housing -- those with an elastic supply -- rising demand spurs more new housing rather than higher prices. Home buyers do indeed receive the subsidies’ benefits (though they often take an environmental hit from new, often sprawled construction patterns). The federal programs reduce their cost of housing without raising the cost of housing for renters. 

But the story is different in markets with high demand and tight supply, such as the expensive markets on the coasts -- highly desirable, highly productive metropolitan areas constrained both by geography and restrictions on new construction. In these markets, sellers possess a scarce good in high demand and can force buyers to bid away their federal subsidies. The federal subsidies are bundled into the sales price; in the end, home buyers are neither better off nor worse off than without the subsidies.

Renters, however, are unequivocally worse off. Read more...

From today's Crain's Insider:

The city is weighing a new set of street design guidelines that would make installation of pedestrian-friendly elements, like curb extensions, easier. The Department of Transportation has developed a number of new street and traffic plans in Madison Square Park and other places around the city. But each one requires special budgetary approval, and the city wants to streamline the process. By adopting a series of pre-approved templates, the city could implement the designs without getting capital approval.