Features

November/December 2011 Shovel-Ready Clinics

A job creation idea so obviously good even Washington couldn't possibly say no... could it?

By Jeffrey Leonard

At the same time, local real estate developers and construction companies across the country— which were doing a brisk business building strip malls, doctor’s offices, and the like before the recession—are dying to get back to work. Faced with a growth industry and access to capital, these commercial developers could be counted on not only to build what’s handed to them, but also to take the initiative to get as many projects as possible moving. Private developers could put up the equity themselves, design and build the facilities in joint venture partnerships with community health centers, and then rent out the facilities to the nonprofits on a long-term lease or through various lease-to-own arrangements. Indeed, hungry developers and construction firms would find any number of ways to get the hammers swinging—in small towns and blighted cities across the country—faster than Congress could ever ordain.

And of course, going the SBA route would alleviate many of the headaches and inefficiencies that currently make it so vexing for health centers to fund construction and expansion capital projects. Because SBA 504 loans are routine and efficient to process, the cost of structuring a new project’s financing would plummet. And the interest rates available to beneficiaries of an SBA 504 loan are among the lowest on the market. Right now, they are better than ever.

All those factors would dramatically lower the total cost of any given health center’s commercial real estate acquisition or construction project, which means centers would be able to finance a much higher proportion of the cost through loans. And that, in turn, means many fewer years running silent auctions and bake sales to scrape together a down payment. This is good, because time is of the essence. With real estate values depressed and interest rates at record lows, any health center that managed to receive an SBA 504 loan for a construction project today would wind up with a bargain. Better yet, the center would wind up with a debt burden that would only become more manageable with time, as the center’s revenues rise with inflation, but its payments remain fixed.

It’s hard to imagine Congress appropriating any more direct spending to fuel the construction of health centers. But there’s no good reason why they shouldn’t change a few words in a statute to achieve the same end. Not only would it quickly create much-needed jobs in the construction trades, it would also spark economic activity over the long run in some of the places in America that need it most. In a climate in Washington that is consumed with rhetoric about reducing government expenditures, creating jobs, and the need to get the private sector moving, this small change is one of the most surefire steps that Congress could take to show that government can both lead and get out of the way.

Jeffrey Leonard is the CEO of the Global Environment Fund, a growth capital-oriented investment firm, and the chairman of the Washington Monthly board of directors. He is the author of five books and numerous articles on issues relating to energy, the environment, and economics.

Comments

  • sue rn on October 26, 2011 11:27 AM:

    AMEN!

  • momo on October 26, 2011 2:21 PM:

    a good and through article. refreshingly fair, too.

  • beb on October 26, 2011 5:57 PM:

    The Republicans have already spoken. They will oppose any and everything that Obama proposes. Community Health Clinics... won't happen. That's Kenyan socialism!

  • Equal Opportunity Cynic on October 26, 2011 8:37 PM:

    I got to paragraph 4, then false equivalency fatigue set in.

  • Diane Smith on October 27, 2011 8:13 AM:

    I also believe that Mr. Obama had a lot of serious problems to deal with, but he is a decent and reasonable man and I am sure that he is doing his best!

  • stetrw on October 27, 2011 10:46 AM:

    Whole sale from http://www.sipostyle.com
    Handbags ( Coach Lv fendi D&G) $30
    T-shirts (polo, ed hardy,) $13.88
    Lacoste T-shirt $12
    Jean (True Religion, ed hardy, coogi )$29.68
    Sunglasses ( Oakey, coach, Gucci, Armaini) $9.88
    New era cap $9.88
    Bikini (Ed hardy, polo) $15
    FREE SHIPPING
    ===http://www.sipostyle.com

  • Howey on October 29, 2011 11:36 AM:

    I proposed this same idea almost two years ago on my forum. It's such a simple solution I'm not surprised nobody figured it out.

    http://popculturedoneright.smfforfree.com/index.php/topic,32.0.html

  • cjenk415 on October 30, 2011 3:39 PM:

    I'd say part of the problem is liberals insisting on engaging conservatives as though they were acting in good faith, like what you're doing in this article. In fact, I would say that is the ONLY problem and everything else is just obfuscation.

    Why is the conservative ideology inconsistent?

    BECAUSE. THEY. ARE LYING.

    Their ideology serves and agenda to gain and hold power but it's just a tool they would discard if another tool served better. Quit being suckers, liberals.

  • dcotler on October 30, 2011 4:27 PM:

    So right EOCynic. Does the author really think that liberals harbor the preposterous belief "that spending more federal money is the way out of every problem?" A positive article about a good liberal policy proposal could do without the pro forma smack at a stupid straw man.

  • gfreg on November 03, 2011 2:33 AM:

    Whole sale from http://www.luckyvogue.com
    Handbags ( Coach Lv fendi D&G) $30
    T-shirts (polo, ed hardy,) $13.88
    Lacoste T-shirt $12
    Jean (True Religion, ed hardy, coogi )$29.68
    Sunglasses ( Oakey, coach, Gucci, Armaini) $9.88
    New era cap $9.88
    Bikini (Ed hardy, polo) $15
    FREE SHIPPING
    ===http://www.luckyvogue.com

  • Ben Leet on November 07, 2011 5:44 PM:

    A government guaranteed loan program was proposed by Robert Pollin to generate 18 million new jobs devoted to retrofitting buildings. See the March 8, 2010 issue of Nation Magazine. http://www.thenation.com/article/18-million-jobs-2012?page=0,3 Banks are sitting on about $1 trillion and corporations on $2 trillion, and virtually no jobs are being created. The default rate on government insured loans is historically low. The added cost to the government is relatively low. If 5,700 community health care centers were constructed, California communities would receive about 700 new medical provider centers. And that rate would be national. A problem with these solutions is that they minimize or ignore the problem: inequality. An economy where the majority of workers cannot purchase the products they produce can only shrink. The median household income has shrunk by 10% since 2007. Income inequality creates this condition, and it is unaddressed here in this article or nationally in general. A prime example is that $26,362 is the median income nationally according to the Social Security Administration, and $109,000 is the average economic output per worker according to the Federal Reserve Bank of San Francisco. (I source this information at http://benL8.blogspot.com) This is our learning moment, and this article contributes nicely to my education, but it does not go far enough. Don't forget to look at the Pollin article if you are really interested. Also inequality.org is a good source, toomuchonline.org, and stateofworkingamerica.org.

  • Stella Godbey on November 09, 2011 12:36 AM:

    Present your plan to a congressman, preferably a republican, so they won't automatically reject it as a socialist plot.

  • CaptainVideo on January 01, 2012 12:40 PM:

    "Washington couldn't possibly say no... could it?"

    Of course the Republican House will say no. They want to keep the unemployment rate as high as possible before the election and will oppose anything that can create jobs.

  • accept paypal free shipping on January 10, 2012 10:06 PM:

    Wonderful.

    Share a website with you ,

    http://mcaf.ee/5zn47

    Believe you will love it.

    accept paypal free shipping