The federal and state governments have a range of bills, some already in place, that will govern construction issues in 2023. Workplace safety and employment laws will activate at the national level, along with hiring practices and worksite requirements. At the state level, there is also a range of safety, employment and environmental regulations. Finally, at the county level are zoning ordinances and restrictions on noise.
The following is a representative selection of federal and state construction legislation that either has, will or could become law in 2023.
The U.S. Congress approved the Infrastructure Investment and Jobs Act in November 2021. This bill carries a price tag of $1.2 trillion, which includes $550 billion for transportation, broadband, and utilities; $110 billion for roads, bridges and other major infrastructure projects; and $40 billion for the repair and replacement of bridges. The legislation also allocates more than $65 billion for power infrastructure, including $29 billion for the electricity grid.
The infrastructure bill is expected to help alleviate U.S. inflation and supply chain concerns. It aims to expand domestic preference procurement policies for public work infrastructure, enhance the domestic content requirement of construction materials sold to the federal government under the Buy America Act, and allow for greater transparency in government contracting decisions. It also aims to meet the goal of decarbonizing the power sector by 2035.
The bill provides federal investments in a wide range of infrastructure projects and is expected to help generate new demand for construction services, equipment and materials. Moreover, these investments are expected to create high-paying career prospects in construction and make the economy more efficient and competitive.
Repair and rebuild our roads and bridges
The Bipartisan Infrastructure Law, enacted by Congress and signed into law by President Biden on November 15, 2021, makes the single largest investment in repairing and reconstructing our nation’s bridges since the construction of the interstate highway system. It will rebuild the most economically significant bridges in the country as well as thousands of smaller bridges. The legislation also includes the first-ever Safe Streets and Roads for All program to support projects to reduce traffic fatalities. In the United States, 1 in 5 miles of highways, major roads, and 45,000 bridges are in poor condition. The legislation reauthorizes surface transportation programs for five years and invests $110 billion in additional funding to repair our roads and bridges and support major, transformational projects.
On June 23, 2022, The U.S. House Appropriations Committee approved the fiscal year 2023 Military Construction, Veterans Affairs, and Related Agencies bill. In total, the bill provides $314.1 billion, an increase of $29.5 billion – more than 10 percent – above 2022. Of this amount, discretionary funding for programs such as veterans’ health care and military construction totals $150.5 billion, an increase of $23 billion above 2022. The legislation rebuilds our infrastructure with strong investments to construct critical facilities on military installations, including family housing and childcare centers, and build, repair and retrofit Veterans Affairs facilities.
New York State
“The All-Electric Building Act” would ban gas hookups in new construction in New York starting in 2024. If this bill passes and you’re planning on building a new home, you would need to heat that home with electricity or something other than gas. OSHA has also put in new safety procedures to avoid electrical accidents that have increased the number of construction injury cases over the past two years.
Under Washington’s updated energy code, which will take effect in July 2023, new commercial buildings – including multifamily residential buildings four stories and taller – will be built with high-efficiency electric heat pumps for water and space heating. Washington’s electricity mix is among the cleanest and most affordable in the country, and the new building code is projected to cut more than eight million tons of carbon dioxide by 2050, equivalent to the annual emissions of 1.8 million cars. The updated energy code also includes improvements to building envelopes and efficiency that will further save energy for building users.
Starting in January, most new commercial construction in California will be required to install some solar generation and battery storage, along with heat pump technology, as the state moves toward its zero-carbon goals. The new mandates are not a flat requirement that the buildings need to be self-sustaining. Rather, it is a mandate that designers begin to include solar and battery storage in new building plans starting in January. In many cases, the California standard becomes the national standard because consumer product manufacturers don’t want to make multiple products for individual states.
The construction industry is not without its set of challenges. Supply chain disruptions coupled with general inflation have pushed up inputs to construction by almost 15 percent over the past year. Most contractors are facing labor shortages, which pushes out construction schedules, and rising interest rates are lowering commercial property values, thereby making new construction projects less profitable.
However, the outlook for the nonresidential building market appears promising for this year and next. Construction spending picked up through the first half of the year, particularly for retail and manufacturing facilities.
Construction spending on buildings is projected to rise 6 percent in 2023, according to the American Institute of Architect’s AIA Consensus Construction Forecast. This outlook is somewhat more optimistic than what was projected at the beginning of the year, largely because of the extremely strong gains in the manufacturing category, as well as the surprising strength in retail facilities.