Do we need a massive influx of federal money to fix infrastructure?

One dramatic example to illustrate the seriousness of the infrastructure crisis in the US is the recent problem with lead in the water supply of the city of Flint, Michigan. According to one estimate, fixing the entire water infrastructure in Flint so that everyone could get safe drinking water from their faucets would cost about $1.5 billion or approximately fourteen thousand dollars per resident.  Combining this with the needs of other cities and with work that needs to be done on transportation and other infrastructure, it is easy to see how Trump’s proposal to invest a trillion dollars in infrastructure could be justified.  Spending huge amounts from the federal government budget, however, is not an efficient or cost effective way to respond to infrastructure problems.

The prospects of solving infrastructure problems in a much more cost effective way can also be illustrated by considering the case of providing clean drinking water for the residents of Flint. This illustration is based on an article by Charles Marohn, recently posted on the Strong Towns website.

Marohn points out that “the primary function of the water system in your city is not — as is widely believed — to provide you safe drinking water.” The existing system in most cities including Flint, made up of eight-inch water pipes, was designed to provide enough water for fire-fighting. If the only purpose was to provide water for household needs like drinking and bathing, much smaller pipes would suffice. This is the approach used by rural water systems in some small towns and agricultural areas where clean well-water is not readily available. These smaller pipes make it possible to provide safe drinking water at a lower cost per resident than with conventional urban water systems.

Instead of replacing the entire water system in Flint, where many pipes may be able to last 20 years or longer, the city could build a less expensive parallel system of small pipes. The existing system of lead pipes could be left in place for fire-fighting purposes only. This is but one example of how innovative and unconventional approaches could be used to fix infrastructure for a lower cost.

In many cases, entrepreneurs could devise private innovative solutions that are much more cost effective for replacing and repairing infrastructure. When a pot of federal money is available, cities and towns focus their efforts on getting as large a share of that money as possible, not on finding low cost ways to fix their problems. If instead, cities had to pay most of the costs of fixing infrastructure themselves, they would have a much bigger incentive to find the most cost effective way to do so.