{"id":1004522422,"date":"2021-04-19T09:40:06","date_gmt":"2021-04-19T17:40:06","guid":{"rendered":"http:\/\/internal.cpexecutive.com\/?p=1004522422"},"modified":"2024-03-06T03:02:18","modified_gmt":"2024-03-06T11:02:18","slug":"analysis-the-infrastructure-plan-cre-and-the-economy","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/analysis-the-infrastructure-plan-cre-and-the-economy\/","title":{"rendered":"Analysis: The Infrastructure Plan, CRE and the Economy"},"content":{"rendered":"
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\"Paul
Paul Fiorilla, Director of Research, Yardi Matrix<\/figcaption><\/figure><\/div>\n\n\n

The $2.6 trillion infrastructure bill unveiled by President Biden this month would not only create jobs and boost economic growth in coming years but could free up increased labor supply and unleash higher productivity in the workforce, according to a variety of economists who have assessed the plan.<\/p>\n\n\n\n

An analysis by Moody\u2019s Analytics found that the American Jobs Plan (AJP) would create more than 2.5 million jobs and increase GDP nearly $700 billion by 2025. Meanwhile, the plan\u2019s funding for child care and elder care would also have longer-term impacts on \u201chuman capital\u201d by increasing the participation of women and minorities in the workforce, said Diane Lim, a George Washington University economist, during a recent webinar sponsored by the National Association for Business Economics (NABE).<\/p>\n\n\n\n

While noting that he has some reservations about the proposal, Moody\u2019s Chief Economist Mark Zandi said, \u201cAll in all, it\u2019s a good plan.\u201d<\/p>\n\n\n\n

The proposal would also benefit commercial real estate specifically through measures that include building affordable housing through direct funding; incentivizing municipalities to remove zoning barriers; and financing energy-efficient retrofits, according the CRE Finance Council (CREFC).<\/p>\n\n\n\n

\u201cInfrastructure investment is long overdue and critical in promoting thriving CRE properties and the communities they serve,\u201d said CREFC Executive Director Lisa Pendergast. \u201cThe bill has much to offer, though balancing costs and priorities will be key as Congress moves forward.\u201d<\/p>\n\n\n\n

Critics say that the measure is too large, would add to the soaring federal deficit, could unleash inflation, and should avoid areas that are not traditional \u201chard\u201d infrastructure. Additionally, detractors disapprove of the increase in corporate taxes that would pay for the new spending to make it budget-neutral.<\/p>\n\n\n\n

Douglas Holtz-Eakin, president of the American Action Forum and former director of the Congressional Budget Office, argued during the NABE webinar that reversing parts of the 2017 tax law that reduced corporate tax rates from 35 percent to 21 percent would encourage tax aversion. \u201cIt makes no sense to unwind that,\u201d he said.<\/p>\n\n\n\n

Fixing Infrastructure<\/h2>\n\n\n\n

The AJP is targeting two major areas, Zandi said: the nation\u2019s severely underinvested, \u201cdilapidated public infrastructure,\u201d and the pandemic-ravaged economy. Real GDP fell 3.5 percent in 2020, according to the Bureau of Economic Analysis, and as of March, employment was still 8.4 million jobs below its February 2020 peak.<\/p>\n\n\n\n

Moody\u2019s analysis suggests a large economic impact, though it would take until 2023 to kick in. As written, the bill would create roughly 2.8 million jobs between 2023 and 2026 and add nearly $700 billion to annual GDP, the firm estimates. The impact would then flatten later in the decade.<\/p>\n\n\n\n

The bill falls into five main categories, according to CREFC:<\/p>\n\n\n\n