Transportation and infrastructure spending have always been a focus of NAIOP’s advocacy efforts at the federal level. With surface transportation programs expiring later this year, getting Congress to reauthorize these programs in advance has been one of our top 2026 legislative priorities. A little more than two weeks ago on May 22, the House Transportation and Infrastructure Committee took an important step in that direction when it passed HR 8870, the “BUILD America 250 Act” by a strong bipartisan vote of 62-2.
NAIOP members know how important modern and efficient transportation systems are to the health of the commercial real estate industry, and of the importance of continued robust investment by the federal government. Transportation investment directly influences property values, development opportunities, tenant demand and regional economic growth. It can serve as a catalyst for commercial development in a number of ways:
- New highway interchanges can unlock previously inaccessible land for industrial and retail projects;
- Freight improvements can increase the attractiveness of logistics hubs and distribution centers; and
- Transit investments can support higher-density office, multifamily and mixed-use developments.
Industrial real estate may be among the sectors most directly affected by transportation policy decisions. The rapid growth of e-commerce, domestic manufacturing investment and supply chain reshoring has increased demand for warehouse and distribution facilities. Access to efficient freight corridors, intermodal facilities, ports and rail infrastructure has become a critical site-selection factor. The next iteration of transportation policy should aim to promote investments that enhance freight mobility and strengthen regional logistics markets across the country.
With housing supply and affordability currently being a top concern for policymakers, promoting transit-oriented development (TOD) has become an important public policy consideration for both political parties. Office-to-residential conversions are occurring in many cities, and creation of a federal incentive for adaptive reuse of commercial buildings for residential use is also a top NAIOP legislative priority, with NAIOP-supported bipartisan legislation having already been introduced in the House of Representatives. The policies are complementary, with many cities pursuing office conversions and mixed-use development projects centered around public transportation stations. Federal transit funding can support the expansion and modernization of rail and bus systems that attract both residents and employers.
The current five-year authorization for federal surface transportation programs, the Infrastructure Investment and Jobs Act (IIJA), expires on Sept. 30, 2026. Funding levels, improvements needed for program operations, and the timing of the reauthorizing legislation are all important factors that will be considered as the House and Senate move forward on legislation:
- Funding: The IIJA provided a total of $365 billion for highway programs, with $304 billion coming from Highway Trust Fund, with the rest subject to Congress having provided the funding in later appropriations. The BUILD America 250 Act is a five-year reauthorization through 2031, that invests in roads, bridges, transit and rail infrastructure, and would fund transportation programs through a combination of guaranteed Highway Trust Fund spending and authorized funding requiring annual congressional appropriations. It authorizes approximately $580 billion in transportation spending over five years, with approximately $474 billion coming from the Highway Trust Fund.
- Improvements: The reauthorization of transportation and infrastructure programs provides an opportunity to streamline project delivery while simultaneously reducing costs. Environmental reviews, permitting requirements and interagency coordination can significantly increase the time it takes to bring a project to completion, thereby increasing project costs and uncertainty. Reforms that accelerate infrastructure project timelines while maintaining appropriate environmental protections are needed. Faster delivery of transportation projects can create more predictable development environments and support economic growth.
- Timing: Large-scale development projects often require years of planning, permitting, financing and construction. Developers, investors and local governments rely on predictable infrastructure funding to support long-term growth strategies. The sooner that long-term reauthorization legislation is enacted, the sooner state and local governments can begin planning longer-term infrastructure and transportation investments that can lead to greater economic benefits for their communities.
The Senate has yet to produce its own version of reauthorization legislation, and any policy differences with the House will need to be resolved before legislation gets signed by the president. How the Highway Trust Fund is financed in the future – currently, it is financed through taxes on gasoline – will surely be a source of debate due to declining fuel tax revenues and increasing vehicle efficiency. For its part, the House included a new revenue stream from electric vehicles. The Senate is likely to have different funding mechanisms.
In terms of timing, the good news is that the House committee passed its bill with a strong bipartisan vote more than four months before the current legislative authorization expires, with the House expected to pass the bill shortly. As such, they would be farther along than some previous reauthorizations.
But with congressional midterm elections occurring this November, and with Republicans having such slim majorities in both the House and Senate, Democrats may prefer waiting until after the elections to pass a transportation reauthorization bill so as not to provide Republicans with a substantial legislative victory. A short-term continuation of current programs would then be the likely scenario.
In either scenario, NAIOP will be engaging with House and Senate members and their leadership throughout the legislative process, pushing for faster action and for policy changes that support responsible commercial real estate and economic development benefiting their communities.
