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How the Stimulus Package Helps Construction
Written February 17, 2009 by John Hendricks, AIA Architect • Filed Under Contractors, Green Options While it is debatable how much the new stimulus package will help the U.S. economy in the short term, there are areas of the bill that will help the construction industry. The American Institute of Architects believes that the bill will create or save as many as 14,000 architect jobs over the next two years, according to AIA President Marvin Malecha.
A whopping $29 billion will be allocated to modernizing roads and bridges, which will help many contractors in those fields, in addition to $18 billion for clean water, flood control and environmental restorations. Also $5 billion will be used to upgrade Defense Department facilities, including housing for troops.
Energy efficiency is another huge part of the bill, with $20 billion allocated. Homeowners who add energy efficient windows, furnaces, heat pumps and air conditioners can get a tax credit to cover 30 percent of the costs, up to a total of $1,500. The credit can also be used by home owners to replace windows or upgrade their insulation. About $300 million will also be given out when buying efficient appliances. Another $5 billion dollars will help low-income home owners make energy improvements. This will greatly help many suppliers and contractors who are involved in these types of work, not to mention homeowner’s future energy bills.
There are also tax breaks for people wanting to install solar panels or wind turbines to power their homes.
About $8 billion will go towards the modernization and renovation of schools and colleges.
Environmental projects at the Interior Department and the Environmental Protection Agency will be given $9.2 billion. This will include building energy efficient visitor centers at national parks and wildlife refuges.
Billions will go towards mass transit. Stations will need to be designed and built. I believe there also might be something in there in regards to building green affordable housing, which of course also benefits architects and contractors.
The National Council of Architectural Registration Board has also listed the following facilities to be built:
* General Services Administration (GSA), energy-efficiency upgrades for federal buildings: $4.5 billion
* Facilities on federal and tribal lands: $3 billion
* National Institutes of Health, facilities upgrades/construction: $1.5 billion
* National Science Foundation, research equipment and facilities upgrades/construction: $600 million
* Department of Homeland Security, new headquarters: $450 million
* National Oceanic and Atmospheric Administration, procurement, acquisition, and facilities construction: $430 million
* Department of Homeland Security, ports of entry: $420 million
* National Institute of Standards and Technology, facilities construction: $360 million
* Department of Agriculture, facilities: $330 million
* Border stations and ports of entry: $300 million
* U.S. Courthouses and other GSA buildings: $300 million
* Fire stations: $210 million
* State Department, Capital Investment Fund: $90 million
* Smithsonian facilities: $25 million
There are parts of the bill that could help individuals and their families, such as:
* A refundable tax credit of up to $400 per worker ($800 per couple filing jointly)
* An expansion of the child tax credit, from two to three children
* Extended unemployment benefits through December of 2009
How does the stimulus bill affect our business?
We specialize in luxury mountain homes, although we do just about everything from Tuscan style to beach house style, from small residential additions to large recreational buildings. Most of our clients historically have been in the private sector and in the higher income classes, and the stimulus package is not geared to specifically help the upper classes. However, while the energy efficient options are always specified by us, the tax credits and rebates could be added incentive for home owners to build, on top of more competitive contractors, and cheaper supplies and shipping costs.
We have always designed everything to meet current codes, and we recommend that home owners go beyond those to save on future energy costs. For example, instead of using an R-38 insulation value at the roof, an R-54 will insulate the house even better, and will save on long term costs. In older homes, the combination of lower insulated walls, single pane windows, and air gaps causes so much fluctuation in temperatures that furnaces are constantly turning on and off in the winter.
As I mentioned, there are a lot of great deals out there already, and these extra incentives could be all some people need to get going. Many architecture firms can’t count on two hands the number of projects and potential projects that are on hold. Some of these projects are starting to come back to life, mostly from people wanting to take advantage of all of the deals. This trickle could turn into a stream of projects flooding architect’s offices within the next year. In addition, architects designing government buildings could make out very well with this stimulus package.
I believe that banks lending money again will have the biggest affect for us personally, as many of our clients use loan money to fund their projects. The new stimulus package certainly does not have what most of the construction industry was looking for, but in this economy we should take whatever we can get. Hopefully this can all be part of the light at the end of the tunnel for everybody.
John Hendricks, AIA Architect, NCARB
Hendricks Architecture
For more information, please see this link from the AIA.
2 Comments
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Thanks for the insight John. Does your firm have a focus on energy efficiency? I have been reading about energy efficient architects lately and what they are doing in that arena. Also, are you a residential architect for the Spokane area or do you stay local? I have looked over your portfolio and see your work is divided between mountain style architecture at the luxury end as well as doing more cabin style. Have you ventured outside of the mountain style at all? Thanks for the feedback ahead of time!
Thank you for the comment and the questions Marie. Energy efficiency has always been part of the big picture for us. From a building’s placement on site to specifying appliances, energy efficiency is always a part of the package.
We have designed homes in Florida and Acapulco so Spokane is definitely in our range.
Lastly, probably 80% of my experience as an architect is in mountain lodge style residences and cabins. However, I’ve also designed architecture from waterfront beach style homes, Mediterranean style homes and Tuscan villas, to the Northwest, Adirondack and ranch styles. Typically, I’ll add something to the style to make it fit the Owner’s tastes. My design’s are always custom, and based on the Owner’s own dreams and aspirations, with the goal of always exceeding those. So every project is different, which makes my job a lot of fun!