by Bill McBride on 1/11/2009 02:37:00 PM
Sunday, January 11, 2009
Last year I noted that there weren't anywhere near enough shovel ready public projects to even offset the expected decline in non-residential structure investment in 2009 - much less make up for the declines in residential construction employment and other areas of job losses.
In May of 2008, I estimated the decrease in non-residential investment for malls, offices and lodging alone at about $60 billion. This is far greater than the $18.4 billion estimate of shovel ready projects from The American Association of State Highway and Transportation Officials.
As the Obama team has noted, properly chosen infrastructure projects provide the best bang for the buck. These projects provide jobs today, and they are an investment in the future. We need more projects ...
And since Obama asked for suggestions ... How about a demolition program?
First, if any state and local governments have old idle buildings waiting for future plans, why not demolish them today? This would provide jobs for local workers, and prepare the land for future development and remove an eyesore. The Federal Government could pay for this demolition.
Second, how about a tax credit for demolishing residential housing units? In many areas there are old, vacant housing units. These are a public nuisance, but the owners have no motivation to demolish the property. Why not provide a tax credit if the properties are demolished in 2009? This could eliminate housing units from the housing stock, provide local jobs, and possibly remove a public nuisance.
A demolition plan would probably only add a few billion to the stimulus package, but it would be well targeted providing jobs in many communities and prepare the land for renewed growth in the future.
Just my 2 cents ...