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infrastructure: a good investment one way …

By enelson
Thursday, June 7th, 2007 at 5:27 pm in Caltrans, Carpooling, Funding.

Last fall our elected leaders, almost to a person, told us that the $43 billion in infrastructure bonds on the November ballot were a good investment in transportation, flood control and educational facilities that had been neglected for decades.

Now Bill Lockyer, elected state treasurer in the same election, wants to convince Californians that infrastructure is also a good investment.

No, there’s no echo in here.

Lockyer announced today that his folks are launching a Web site to make it easier for the average taxpayer with a bit of money to sock away to buy some of the $2.5 billion worth of the infrastructure bonds his department will be selling June 18 and 19.

To a non-investor like myself, it sounds like a great idea. I mean, all of us taxpayers are going to be paying the debt service (interest, etc.) on these things, so why not collect some of it back?

But I decided to check with an investment-savvy colleague, who directed me to a recent Urban Land Institute and Ernst & Young report on just this type of investing.

Among many other findings, most of which have to do with our nation’s miserable recent track record of augmenting and maintaining infrastructure, are that putting one’s money into highways, train tracks and levees is almost as trendy as a Chihuahua in a handbag:

Infrastructure emerges as a new asset class for investors, with massive needs attracting large pools of private capital; double-digit returns are sought, but high single-digit returns are more likely, particularly for mature assets.

Clearly, there are many investors who would sneer at such an investment, especially if you want to earn high returns. But if you want something that will earn a stable income and will give you warm fuzzies when you drive by the new carpool lanes on I-880, this bond’s for you.

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One Response to “infrastructure: a good investment one way …”

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