Here Are The States That Will Gain The Most Under Biden's Infrastructure Bill
The spending is also likely to further squeeze materials and commodities that are already in short supply, as well as labor.
California, Texas, and New York stand to gain the most from President Biden’s $1.2 trillion infrastructure package, according to a new analysis from Newmark.
The Golden State is predicted to receive $45 billion in funding from the Infrastructure Investments and Jobs act, followed by Texas at $35 billion and New York at $27 billion. Overall, the legislation, which is funded by repurposed, unspent monies and new revenue, will fund previously-approved infrastructure projects and programs. It also includes an estimated $550 billion in new investment for projects ranging from hard infrastructure to water, power, and internet infrastructure.
Newmark cites Urban Land Institute data that indicates that the quality of infrastructure—particularly roads, bridges, and public transit—is a key driver of real estate development decisions. With the majority of IIJA funds being directed to the transportation sector, the legislation has “myriad long-term implications” for the industrial asset class. The largest allocation of funds ($110 billion) will be pushed toward improving roads and bridges, and “once transportation improvement or expansion projects have been officially identified, land for industrial development as well as existing industrial properties in the vicinity may increase in value,” the report states.
Another $65 billion has been earmarked for improving and expanding internet access, which will be crucial for the white-hot e-commerce sector. Improving ease of access to goods online will bring new customers into what Newmark calls “the digital economy” and has the potential to further expand industrial demand.
The spending is also likely to further squeeze materials and commodities that are already in short supply, as well as labor in the form of skilled trades and administration, according to Newmark’s analysis.
“Labor and commodities markets are still in a state of pandemic-induced volatility, but new spending and construction related to this bill will not commence until well into 2022 at the earliest, and thus may not exacerbate the current shortages of commodities and resultant pricing increases,” the report notes. “However, timing could still present challenges on the path to infrastructure opportunity, particularly in sourcing skilled labor—often a difficulty in the construction sector even prior to the pandemic.”