Home » Military realignment will affect all construction; home builders, architects are upbeat May 16, 2005
Secretary of Defense Donald Rumsfeld issued his recommendations on Friday for closing, expanding, or realigning hundreds of military facilities in every state and the District of Columbia (complete list and other links are at www.defenselink.mil/brac). The list will be vetted by the 2005 Base Realignment and Closure Commission, which can pare, but not expand, the list before it goes to President Bush by September 8. He must approve or reject it unchanged by September 23, after which Congress has 45 “legislative days” to reject the entire list or it becomes binding. Rumsfeld called for closing 33 “major bases,” defined as installations that would cost $100 million or more to replace, in 22 states. In addition, many workers would move out of leased space that the Department of Defense (DoD) deems insufficiently secure. An estimated 218,000 military and civilian DoD employees would lose their current posts, while 189,000, plus 3,000 contractors, would be added elsewhere. There would be multiple implications for construction. Facilities to which workers and functions are relocating would need new construction on-base and would attract nearby housing, retail, services, and contractors' offices. Abandoned facilities would depress rental and construction markets in the surrounding area. The resulting loss of property and sales tax revenue, and perhaps population, could cause local governments to cancel or postpone public construction. In some cases, cities might benefit from replacing a military facility with higher-value civilian uses. But an article in Sunday's New York Times, citing a report last January by the Government Accountability Office, notes that DoD can take many years to turn over some abandoned property.
Home builders' confidence rebounded in April from a small dip in March, according to survey data released today by the National Assn. of Home Builders. The overall index rose to 70 out of a possible 100 from 67, on a scale in which any number over 50 indicates that more builders view sales conditions as good than poor. The index is assembled from three sub-indexes, of which the component gauging current single-family sales rose from 73 to 76, while the components gauging sales expectations for the next six months and traffic of prospective buyers were 77 and 53, respectively.