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Create a Public-Realm Endowment, by Alex Garvin
Recent headlines about crumbling infrastructure have grabbed the entire country's attention. But there is even more to the story than collapsing bridges (Minneapolis) and blown steam pipes (New York). The failure to invest in infrastructure is also causing major opposition to additional real estate development. Residents of areas with overcrowded schools and heavily trafficked roads want to stop development, especially when they are asked to foot the bill for public investment in improved or expanded infrastructure and community facilities. The easy government response is to make developers pay an impact fee; this only increases the cost of buying a house, and forces developers to move further and further into the countryside in search of cheap land and an escape from fees that result in homes that are prohibitively expensive to the middle class.

In many metropolitan areas across the United States, commuters are reaching the limit they are willing to travel in search of affordable residences. Consequently, real estate developers are reverting to higher density infill development in older suburban areas-second growth. Here too, existing communities are objecting to congestion and decline in their quality of life.

The inadequacy of the public realm and existing infrastructure, whether in areas of greenfield development or suburban second growth can be corrected by public investment. The cost of that investment can be captured from the incremental increase in tax revenues. Consequently, I would not invest the $1.6 trillion directly in public construction.

I would use that money to create a public realm endowment and offer the income from the endowment to communities that use to the money to cover the cost of planning, design, and engineering, provided that they establish a tax increment district that will generate an income stream that is adequate to retire the debt on bonds that would finance public investment.