Almost 15 months have passed since President Barack Obama signed the American Recovery and Reinvestment Act (ARRA) into law. Within the massive $787 billion funding package, the AIA identified about $98 billion as available for the built environment (see “Follow the Money,” June 2009). How has ARRA played out? If you’re an architect, the answer depends on whether or not you’ve seen any work from it.
“For a number of firms that have gotten commissions for federal buildings, transit facilities, housing, etc., it has meant the difference between staying in business and laying off staff,” says Andrew Goldberg, the AIA’s senior director of federal relations. Yet it’s difficult to measure in dollar amounts how much has gone to architects, he notes, because the reporting mechanisms don’t track this explicitly. “We do know, based on an AIA firm survey [last] August, that 15 percent of firms had received billable work from [the] stimulus, a number we expect to go up as more money hits the streets,” Goldberg says. “But a lot of firms, particularly those in the commercial sector, say they haven’t seen any real benefit.”
“The stimulus was a really good idea,” says Kurt Rockstroh, president and CEO of Boston-based Steffian Bradley Architects, which specializes in healthcare. “It’s ironic that it slowed work down and had a negative impact on 2009.” This April, many of the firm’s clients were still waiting to learn if their funding requests were approved, he says, adding, “Being left in limbo is a daily conversation.”
Research by Onvia, a provider of private-sector and government procurement information, bears this out. Its February report said that most stimulus funding hadn’t left Washington, D.C., but Onvia did project that $76 billion in funds will reach the infrastructure marketplace this year, resulting in 480,000 new construction-industry jobs.
In this realm, the U.S. General Services Administration (GSA) is among the largest awards-makers, with more than $5.5 billion for the High Performance and Sustainable Buildings program to fund renovations and new buildings at LEED Silver standards. In early April, the GSA announced it had infused more than $4 billion into 391 projects in all 50 states, two territories, and Washington, D.C. Among the beneficiaries: 4240 Architecture, with offices in Denver and Chicago, was awarded $2.1 million for design, modernization, and performance improvements to Chicago’s 10 West Jackson Federal Building.
Another major source is the U.S. Department of Housing and Urban Development, which has $4 billion available for energy-efficient retrofits and new affordable-housing projects. San Francisco’s Paulett Taggart Architects is working on the Turk/Eddy affordable housing building, which received about $11 million, and two blocks of the Hunters View redevelopment, which received $6 million.
Yet other firms aren’t feeling the love. John Hrivnak, principal of Hrivnak & Associates, in St. Charles, Ill., says his billings have decreased more than tenfold since the downturn began. He urges the Obama administration to create more stimulus activities aimed directly at the private sector. “Private-sector jobs create real wealth … and new tax revenues. JFK did that and it worked. Reagan did that and it worked. It’s not a party thing, it’s prudent economic policy. If the government wants to really stimulate the economy, they need to get architects busier.”
Indeed, most in the industry aren’t busier. A January report by the President’s Council of Economic Advisors noted that 94,000 construction jobs had been created through ARRA. However, unemployment for the entire construction industry was 24.9 percent in March, according to the U.S. Department of Labor, which doesn’t track unemployment among architects specifically.
Local firms are definitely feeling the pinch. The situation is especially dire in Nevada. “Currently, in Las Vegas, unemployment in the design and construction industry is at 65 percent and continuing to rise. And in Reno, the rate is 50 percent and rising,” said Randy Lavigne, executive director of AIA Nevada and AIA Las Vegas, in March. “Many architecture and related industry firms have closed or downsized significantly due to the fact that there are no jobs on the drawing boards. And when planning and design stops, all work in the industry stops.”
Adds the AIA’s Goldberg: “Nobody expected the stimulus bill to be a panacea when it was passed, and while it has helped, it certainly has not cured the underlying problems in the credit markets and consumer demand, which have kept projects from moving forward.”
On March 18, President Obama signed a $17.6 billion jobs bill that provides tax breaks for businesses and additional infrastructure spending in hopes of jump-starting hiring. Given the lag between the signing of ARRA and any significant impact on jobs and projects, it’s hard to say when architects will begin to see true benefits from the latest legislation.
U.S. Construction Spending, February 2010
Total: $846.2 billion
vs. February 2009: -12.8%
Private: $553.5 billion
vs. February 2009: -16.3%
Public: $292.7 billion
vs. February 2009: -5.4%
Residential: $258.5 billion
vs. February 2009: -3.8%
Nonresidential: $587.7 billion
vs. February 2009: -16.2%