The Angle

Since the economic crisis exploded onto the front page last fall, the biggest issue facing policymakers has been ensuring that credit is available for businesses, homeowners, and others looking for capital. The Troubled Assets Relief Program (TARP), created by Congress in late 2008 to buy up so-called “toxic assets,” was quickly re-oriented toward injecting liquidity into financial institutions so they would lend again.

Now, nine months later, many banks are healthier, and some are even repaying back their TARP money – but are they lending again?

According to last March’s Architecture Billings Index survey, eight in 10 design firms reported that credit availability was more restrictive in the past. The result is that projects on the board are being stalled, delayed, or outright canceled.

The AIA is looking at proposals to bring to the Treasury Department, the Federal Reserve, and Congress to free up capital for large projects, recognizing that every $1 million spent on design and construction creates 28.5 full time jobs.

We want to hear from you: Have your projects been sidelined because your clients can’t access capital? What kinds of projects and how large? How long have they been delayed? And what is the impact on your bottom line?

Every president from George Washington to Barack Obama has extolled the virtues of small businesses (at least we assume Washington did, in between not telling lies and fathering the country). And there’s good reason: studies show that small businesses create the vast majority of new jobs in this country. That is why the federal government, particularly through the U.S. Small Business Administration (SBA), offers scores of programs, incentives and financing options to help small companies form and grow. That includes small architecture firms.

The question is, though, what constitutes a small business, especially a small architecture firm?

According to the SBA, in most non-manufacturing industries a small business is one that has no more than $7 million in annual average receipts. Landscape architect and interior design businesses are defined as small if they are at or below that $7 million threshold. However, the SBA defines a small architectural business as having no more than $4.5 million in average annual receipts. The same goes for engineering businesses. The SBA explains how it derives at these figures, based on a number of factors.

Is that fair? Being a small business opens a world of loans and assistance and even government contracting opportunities. Are some small-but-not-small-enough-by-SBA-standards architecture firms (i.e., those that are between $4.5 million and $7 million) at a competitive disadvantage? Or are the numbers right? Let us know what you think.

"America's architects stand ready to work with President Obama and Congress to help rebuild and renew America," said Marvin Malecha, FAIA, president of the American Institute of Architects.

"Achieving the priorities that the President outlined in his address last night will require the support and participation of architects - whether to design the next generation of green buildings that help break our addiction to foreign oil, build the hospitals and health facilities that revolutionize how medicine is delivered, or modernize schools to help our children compete in the global economy.

Also, we hope that the President and Congress look at the historic investments made in the economic recovery bill for green buildings and infrastructure as just a down payment, and not the last word. When we face a $2.2 trillion shortfall in infrastructure investments, and when as many as 1 in 5 American children call a portable trailer their classroom, we cannot afford to let the forward momentum slow."

The New York Times has an interesting article on the efforts of AIANY to encourage architects to apply to join their local community review board.  Roughly 30 of their members have already said that they plan to apply.  This is an encouraging step and an extension of an initiative from AIA national to stress importance of civic engagement for the architecture profession.

For more information on the value of "citizen architects" and how you can engage with your local community, contact Brooks Rainwater, AIA director, Local Relations. 

When Barack Obama signed the stimulus bill into action yesterday, it was a big step forward to improving areas like our national infrastructure, schools and communities for the better.  And in the next few weeks, as the government determines how much money states will receive, and in turn, how states divide their share - we will see projects that have been on hold finally start to get off the ground.

However, it's of the utmost importance that we hearken back to two calls to action the AIA first issued when talks of the stimulus first began:  The need to plan and the need to make sure that a mix of long-term and "shovel-ready" projects receive funds.   Recently, Popular Mechanics wrote an excellent piece on this very topic, which not only explained why "shovel-ready" was a dangerous buzzword, but echoing the call from the design and construction industry that not incorporating long-term projects into planning will prove a waste of these needed and precious dollars.

 

We encourage architects all over the country to write your editorial boards, petition local government and work closely with your contacts in these sectors to make sure that we use this opportunity wisely.  As architects, we know what can happen when planning, smart design and construction come together.  Now, let's show the country as well.

 

AIA President, Marvin Malecha, FAIA, said, "Now that the economic stimulus bill is finalized architects and design and construction professionals are ready to work closely with state and local officials to help them use these resources effectively."

"We are pleased that Congress listened to the views of thousands of design professionals in passing the American Recovery and Reinvestment Act with provisions that promote green, energy-efficient buildings and tax relief that helps firms struggling to cope with this recession. The bill funds infrastructure projects to create thousands of jobs - right away - in industries devastated by the economic crisis.  And, if executed smartly, the benefits of the investment will last for decades.

Renovating and repairing school buildings ensures that our children will learn in safer, healthy environments. The fact that mobile trailers serve as the primary classroom for as many as one in five American students is a national shame; we need to fix that.

The design and construction of affordable housing funded by this bill will help more hard-working Americans find and keep a place to live. Investments in mass transit will reduce the traffic congestion that is choking our communities. Making our federal buildings more energy efficient will save taxpayers millions of dollars and reduce the effects of carbon dioxide emissions on the earth's climate.

However, we urge our federal government leaders to consider this bill's funding a modest start. With a $2.2 trillion shortfall in infrastructure investment, including a $300 billion need to repair and modernize schools, the work of Congress and the Administration is far from over. This bill is just a down payment, and we will continue fighting for additional investment to make sure our nation has a 21st century infrastructure for a 21st century economy.

Our goal must be not just to build, but to build better: greener buildings, modern schools and a transportation system that strengthens communities. Members of the AIA are prepared to meet the challenge to rebuild and renew. Now, it's time for us all to get to work."

Tuesday, Feb. 10

4:30 pm AIA sends a letter signed by more than 80 organizations and companies in support of school modernization funding to Capitol Hill

5:00 pm AIA joins with several organizations to send a letter to Capitol Hill in support of funding green federal buildings

6:30 pm Upon learning which members of Congress will be in negotiations on the stimulus bill, AIA staff communicate to their staffs about AIA positions

9:30 pm AIA staff develop talking points and other materials for AIA members to use in talking to their representatives in support of green buildings in the stimulus bill

10:30 pm AIA speaks to staff for Speaker Pelosi about stimulus and AIA priorities

(Contract magazine coverage of AIA concerns over elimination of school funding)

Wednesday, Feb. 11

8:30 am AIA staff meet with GSA officials to discuss green federal buildings funding in bill

(Arch Record coverage of finalization of stimulus bill)

9:00 am  Harry Gordon, FAIA, testifies before a House subcommittee in support of funding  green federal buildings in stimulus

(Federal Times coverage of testimony) 10:45 am AIA sends an action alert to its members, calling on them to contact their members of Congress in support of green buildings. More than 2100 members make 6400 contacts to Capitol Hill

11:30 am AIA staff talk to Senate committee staff about green federal buildings funding in bill

12:00 pm  AIA Media Relations coordinates interview with Mr. Gordon and Environment & Energy TV, a leading Washington media source for news on energy issues, about the stimulus

(Interview seen here: http://www.eenews.net/tv/ requires login: Username: sfrank@aia.org Password: eenews)

 

Continue reading "24+ Hours in the LIfe of AIA Lobbying Efforts" »

AIA Vice President, Government & Community Relations, Paul Mendelsohn said, “We are especially disappointed that the funding to modernize schools has been eliminated in the Senate version of the stimulus bill.  Not only are America’s schools in desperate need of repairs, but the money allocated in the House version of the bill would result in the creation of 400,000 jobs nationwide.  Schools are the only building type where, through green design, you can reduce energy consumption, improve the environment and create a learning environment where students will be better prepared to compete in a global workplace.”

Mendelsohn added, “As President Obama remarked in his news conference, ‘Why wouldn’t you want to invest in state of the art schools?’  We call on Congress to include the $14 billion for green, high-performing schools in the final version of the stimulus bill.”

 

“We are deeply troubled by reports that the Senate may consider cutting funds from the stimulus package for making federal buildings energy efficient,” said Marvin Malecha,FAIA, president of the American Institute of Architects. “Retrofitting federal buildings not only will save energy and lower costs to taxpayers; it will immediately create tens of thousands of private sector jobs. The General Services Administration has identified more than 500 shovel-ready federal building projects that, if funded, could begin within 90 to 180 days. Cutting this funding will deprive thousands of hard working Americans in the design and construction trades the chance to get back to work at a time when these industries have all but collapsed. We call on Congress to reject this short-sighted and recovery-killing idea.”

Today and tomorrow, the AIA’s membership will converge on Capitol Hill to meet with members of Congress about the economic recovery bill. Over the past two years an  estimated one million jobs have been lost in the design and construction industry, and all indicators point to a continuing decline for the sector.

Federal infrastructure investments in our nation’s buildings will put Americans back to work almost immediately. The General Services Administration has identified more than 500 federal building projects that, if funded, could begin within 90 to 180 days. Pursuing these projects would immediately create tens of thousands of jobs for architects, engineers, contractors, electricians, heating and air conditioning installers, carpenters, construction equipment operators, roofers, insulation workers, construction managers, building inspectors, and the many other building professionals who are needed to design, construct and renovate a building. Investments in other building types such as schools, commercial buildings, health care facilities, state and municipal buildings and affordable housing, also have the potential to create hundreds of thousands of jobs nationwide. 

Investing in building construction and renovation will not simply create jobs in the short term but also will establish the foundation for sustained economic growth. We urge Congress to ensure that any economic recovery plan it sends to President Obama includes significant investments in the building sector in order to  create jobs, move our nation closer to energy independence, and improve the quality of life for citizens in all 50 states.