NOW HIRING!

Commercial real estate industry insights.

Population Growth, Government Funding Driving Strong Infrastructure Project Demand in 2024

by T.J. Smith and Mark Sadler | Feb 15, 2024

Demand for infrastructure projects is expected to show continued strength in 2024, with the nation’s Sun Belt region leading the way for this asset class.

Population growth is primarily driving work on improving roads, highways, bridges, rail lines, electrical transmission lines, oil and gas pipelines and water and sewerage systems.

The biggest beneficiaries of infrastructure projects are the South and West, the country’s fastest-growing regions. For example, Texas, one of the nation’s high-growth states, is planning to spend a record $100 billion over a 10-year period to maintain roadways, alleviate congestion and increase traffic safety.

Another key factor boosting infrastructure projects is the passage of two pieces of federal legislation in recent years, the Bipartisan Infrastructure Law and the Inflation Reduction Act.  The legislation approved hundreds of billions of dollars to fund essential infrastructure projects across the country.

Infrastructure Projects Spurring Strong Demand for ROW Appraisals

Appraisers specializing in Right-of-Way (ROW) projects are urgently needed to meet surging demand for these construction projects. ROW appraisals help buyers and sellers reach fair and equitable values on properties and ensure that projects comply with building and zoning requirements.

A significant portion of infrastructure projects requiring ROW appraisals include upgrading roads and highways, many of which have fallen into disrepair or in dire need of expansion resulting from an ever-increasing volume of traffic. Vehicles traveling U.S. roadways soared from 65 million vehicles in 1956 – the year legislation was passed to fund the country’s interstate highway system — to more than five times that number in 2019, a 324 percent increase, according to one industry statistic.

ROW appraisals are also necessary to keep America’s energy and water infrastructure humming along. Like roadway projects, oil and gas companies and utilities need to acquire properties to meet population growth demands. ROW appraisal services for energy infrastructure projects range from building new oil and gas pipelines to sending clean energy (wind and solar) through transmission lines to help power cities and towns.    

Market Forces, Surveyor Shortage Brings Challenges

lnfrastructure projects have largely averted the challenging market conditions faced by other CRE segments within the past couple of years, yet they still have their own set of challenges.

Cities and states experiencing COVID-related declines in tax revenue delayed some infrastructure projects. However, federal and state funding for highways and other projects blunted some of the pandemic’s impact on this work.

Perhaps the greatest challenge facing the infrastructure building industry overall is a chronic shortage of land surveyors needed to delineate acquisition boundaries which, in turn, has resulted in delays on some projects.

According to personnel recruiting firm GeoSearch, the number of surveyors is expected to grow only by 2 percent through 2030. A confluence of factors is attributed to the shortage including an aging workforce which has less than one-fifth of surveyors under 34 years old, a lack of interest in this field and qualified surveyors, and increasing complexity of surveying technology.

In some cases, ROW practice groups can offset some revenue losses at their appraisal firms from delayed projects and the challenges in their other business segments by providing invaluable expert witness testimony at hearings and trials for planned infrastructure projects. 

BBG’s ROW practice group offers the extensive expertise and knowledge required for accurate, timely and comprehensive ROW appraisals and related services for a wide array of infrastructure projects. For more information, contact BBG at www.bbgres.com.