"Build America Bonds" Program Generates $44-$50B in New Construction, AIA Says

AIA Calls for Renewal of Program to Spur Job Creations in Design and Construction Industry  

WASHINGTON, D.C. — The American Institute of Architects has called on Congress to renew in full the Build America Bonds program, in the wake of an AIA estimate that it generated between $44 to $50 billion in new construction activity and jobs in the last two years alone.

By providing an attractive tax-credit bond to a wide range of investors, the program exceeded most expectations, and more than $180 billion in municipal debt was issued through the BABs program in 2009 and 2010. Under the program, states received a subsidy payment equal to 35 percent of the interest costs of their bonds.

Despite strong support from local governments and financial institutions, the program expired at the end of 2010. President Obama and members of both political parties are interested in renewing the program this year or in fiscal year 2012.

Using data obtained from Thompson Reuters and the Securities Industry and Financial Markets Association (SIFMA), the AIA estimates that Build American Bonds financed between $44 and $50 billion in building construction activity that required architectural services. Assuming design services typically amount to roughly 5 percent of total costs, this would mean that the program provided between $2.2 and $3 billion for architects in the last two years.

“We respect Congress’s concern for the deficit and the tough choices they must make, but delaying maintenance projects does not save our country any money,” said Paul Mendelsohn, VP of Government and Community Relations for the AIA. “It simply adds to the growing infrastructure project deficit that will be more expensive to do later, especially as interest rates inevitably begin to rise.”

“The best way to cut the fiscal deficit is to get design and construction workers off unemployment and back to work, especially in a design and construction industry where jobs have been cut more than 23 percent from their peak in 2007,” Mendelsohn adds.

For a link to the full report:

http://www.aia.org/advocacy/federal/issuebriefs/AIAB088553

About The American Institute of Architects

For over 150 years, members of the American Institute of Architects have worked with each other and their communities to create more valuable, healthy, secure, and sustainable buildings and cityscapes. Members adhere to a code of ethics and professional conduct to ensure the highest standards in professional practice. Embracing their responsibility to serve society, AIA members engage civic and government leaders and the public in helping find needed solutions to pressing issues facing our communities, institutions, nation and world. Visit www.aia.org.