Public and Private Built Investment in the New Economy: Exploring Regional Differences, 1990–2000

Abstract

Built investment in buildings, facilities, and infrastructure underpin the performance of cities and regions, so the ways built investments influence the economic success of regions are important. This paper reports analyses of the dynamics of built investments in four regions. We assembled F.W. Dodge proprietary data on built investments from 1990 through 2000 in two midwestern “old economy” regions (Indianapolis, Ind. and Columbus, Ohio), and two new economy stars (Austin, Tex. and Raleigh–Durham, N.C.). The purpose of this analysis is to examine to what extent public and private built investment patterns are linked within each region. The comparative analysis finds that these regions each entertained anywhere from 100,000 to 200,000 construction projects apiece over the 11-year period, ranging from a total of $23 to $49 billion. On a per square mile basis, the regions’ built investments were about even. Shares of built investment originated from the public sector differ widely by category, with higher public shares of transportation, telecommunications, and laboratories generally occurring in the new economy regions. Correlations between public and private built investment vary among the regions. Simple models using local public investments to estimate private investment patterns show strong linkages between education, street, water, and other public infrastructure and private building, but these coefficients also differ across the regions. Austin and Raleigh–Durham show higher levels of covariation between some public infrastructure variables and private built investment.