The federal government is proposing to spend $1 trillion over 10 years to fix roads, bridges and other infrastructure in order to lower the cost of housing.
The proposed plan will focus on the country’s major metropolitan areas, including the largest in the nation, with the most expensive and most sprawling.
As the cost per square foot of new housing rises, so too does the cost to the nation’s housing market, said Mark Zandi, chief economist for Moody’s Analytics.
“What we see is that demand is falling and supply is increasing,” Zandi said.
“So it’s really going to be a game changer for affordability.”
The proposed spending will be aimed at improving transportation infrastructure that is more than a decade old and in need of major upgrades.
It would include building roads and bridges, building stormwater systems, repairing crumbling utilities, and repairing roads and highways in the cities of Los Angeles and San Francisco.
For instance, Zandi estimated that the Federal Highway Administration would spend $350 million to build and maintain a 3.2-mile section of Interstate 5 near San Diego.
He said that if the highway is repaired, it will be a major boon to local businesses, including those in the Bay Area and Los Angeles.
More than half of the spending is earmarked for the cost for highways, bridges, roads and streets.
While the Federal government has yet to outline its plan, it has been widely criticized for its inability to adequately fund the cost.
A $500 million highway upgrade that is already scheduled to begin in 2021 is one example.
Zandi said the Federal transportation department has estimated that if Congress doesn’t act, the cost could reach $1.6 trillion by 2025.
In a statement, the Federal Transportation Agency said that while there are many projects that need to be completed, the federal government will make progress in many areas, such as: Improving road safety, including improving visibility, speeding enforcement and reducing fatalities.
Improved safety by making more accessible parking areas, eliminating barriers to entry, improving pedestrian safety, and improving traffic flow.
Providing transportation infrastructure to help meet the needs of the rapidly growing economy.
Investing in the health of communities.
Reducing greenhouse gas emissions and increasing efficiency in buildings.
Establishing and expanding transportation infrastructure for future generations.
Strengthening the U.S. military, including its readiness to fight, protect and promote the security and well-being of the nation.
Increasing the number of active duty military and reserve personnel who will serve in their local communities, and the number serving on active duty overseas.
Helping to secure the country against cyber threats and cyberattacks.
The spending proposal, which is expected to be voted on as soon as Tuesday, will focus the money on fixing roads, streets, and bridges across the country, including in California, Texas, Florida, New York and the Northeast.
That will help pay for improvements in the safety and comfort of residents and businesses, according to a summary of the proposed spending plan provided by the federal agency.
One of the most costly projects is the Federal Aviation Administration’s $300 million repair of a section of I-5 near San Francisco, which was the site of a fatal car crash in 2009 that left a man dead and injured at least 13 others.
Moody’s estimated that repairing that section would cost $200 million.
But Zandi says that if we were to build a $500 billion highway in 2021, it would only cost $1 billion to repair it.
This is an ongoing project, he said.
If we did the same thing in 2025, it could be a massive improvement in the lives of millions of Americans.
So the idea is to have the infrastructure, and we’ll use the $1,000 billion for roads, and then we’ll do a much better job at getting people into their homes,” Zane said.