The American Institute of Architects (AIA) released a comprehensive report, which concludes that the major obstacle holding back job creation in the U.S. is the persistent lack of construction financing, despite record low interest rates.
“This report should lay to rest any doubt about what is a key source for holding back job creation in the United States,’ said Kermit Baker, chief economist of the AIA. “It is the lack of financing especially to the design and construction sector, which accounts for $1 in $9 of U.S. Gross Domestic Product.”
The report found:
- The share of projects stalled due to financing problems through August 2011 has almost doubled since 2008
- One-in-five stalled projects are directly resulting from financing problems
- Financing problems account for a higher share of stalled projects in the education and multi-family sector
- More than 25% of projects reported as stalled due to the credit crunch could qualify for LEED, Green Globes, or other green certification status
- Financing issues are less of a factor holding back projects in the manufacturing, private healthcare, and retail environments
“Whatever, the reason – be it over-regulation, the threat of a double-dip recession or the reluctance to have too many loans on the books, lenders are just not lending to a major job-producing sector of the American economy,” Baker noted. “Until more credit is extended, the potential of non-residential construction to promote greater levels of economic growth will not be realized.” BD+C
Related Stories
Adaptive Reuse | Aug 31, 2023
Small town takes over big box
GBBN associate Claire Shafer, AIA, breaks down the firm's recreational adaptive reuse project for a small Indiana town.
Giants 400 | Aug 31, 2023
Top 35 Engineering Architecture Firms for 2023
Jacobs, AECOM, Alfa Tech, Burns & McDonnell, and Ramboll top the rankings of the nation's largest engineering architecture (EA) firms for nonresidential buildings and multifamily buildings work, as reported in Building Design+Construction's 2023 Giants 400 Report.
Giants 400 | Aug 30, 2023
Top 75 Engineering Firms for 2023
Kimley-Horn, WSP, Tetra Tech, Langan, and IMEG head the rankings of the nation's largest engineering firms for nonresidential buildings and multifamily buildings work, as reported in Building Design+Construction's 2023 Giants 400 Report.
Building Team | Aug 28, 2023
Navigating challenges in construction administration
Vessel Architecture's Rebekah Schranck, AIA, shares how the demanding task of construction administration can be challenging, but crucial.
Laboratories | Aug 24, 2023
Net-zero carbon science center breaks ground in Canada
Designed by Diamond Schmitt, the new Atlantic Science Enterprise Centre (ASEC) will provide federal scientists and partners with state-of-the-art space and equipment to collaborate on research opportunities.
Multifamily Housing | Aug 24, 2023
A multifamily design for multigenerational living
KTGY’s Family Flat concept showcases the benefits of multigenerational living through a multifamily design lens.
Multifamily Housing | Aug 23, 2023
Constructing multifamily housing buildings to Passive House standards can be done at cost parity
All-electric multi-family Passive House projects can be built at the same cost or close to the same cost as conventionally designed buildings, according to a report by the Passive House Network. The report included a survey of 45 multi-family Passive House buildings in New York and Massachusetts in recent years.
Regulations | Aug 23, 2023
Gas industry drops legal challenge to heat pump requirement in Washington building code
Gas and construction industry groups recently moved to dismiss a lawsuit they had filed to block new Washington state building codes that require heat pumps in new residential and commercial construction. The lawsuit contended that the codes harm the industry groups’ business, interfere with consumer energy choice, and don’t comply with federal law.
Government Buildings | Aug 23, 2023
White House wants to ‘aggressively’ get federal workers back to the office
The Biden administration wants to “aggressively” get federal workers back in the office by September or October. “We are returning to in-person work because it is critical to the well-being of our teams and will enable us to deliver better results for the American people,” according to an email by White House Chief of Staff Jeff Zients. The administration will not eliminate remote work entirely, though.
Building Owners | Aug 23, 2023
Charles Pankow Foundation releases free project delivery selection tool for building owners, developers, and project teams
Building owners and project teams can use the new Building Owner Assessment Tool (BOAT) to better understand how an owner's decision-making profile impacts outcomes for different project delivery methods.
