Research Report Is Federal Infrastructure Investment Advancing Equity Goals?
Examining How the Distribution of New Infrastructure Funding May Address Historic Racial and Economic Inequities
Yonah Freemark, Mel Langness, Amanda Hermans, Gabe Samuels, Tomi Rajninger, David C. Blount
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Federal investment in infrastructure substantially increased over the past two years with the passage of the 2021 Infrastructure Investment and Jobs Act (IIJA). Executive departments will distribute hundreds of billions of dollars to states and localities to invest in enhanced transportation, water supply systems, broadband networks, housing, and more. These projects can improve the quality of life for thousands and reinvigorate decaying built structures across the country. Federal funding programs, however, may not be distributing resources fairly. In the past, public infrastructure projects have deepened racial and social inequities—such as by bulldozing communities of color to build highways or depriving families with low incomes of the quality housing they deserve. It is essential to examine how infrastructure funds are being apportioned to understand whether investments are expanding support for disinvested communities or, in contrast, reinforcing historic inequities.

To explore the distribution of infrastructure funds, our research team developed a first-of-its kind, comprehensive database of projects funded in fiscal year 2022 through 66 federal grant programs contained within IIJA or from the US Department of Housing and Urban Development. These multibillion dollar programs fund transportation, water, energy, broadband, housing, and community development infrastructure, and are allocated to states and localities either automatically by formulas set by Congress and federal agencies or through merit-based competitions judged by federal executive departments. We identify funding distributed directly to entities in nearly 3,000 counties; all 50 states; Washington, DC; and several US territories.

Pursuing a more equitable society requires targeting federal investments to places and people experiencing historical injustice and compounded disadvantage, so that funds can start to close longstanding gaps in outcomes. We primarily focus on measuring the distributional equity of infrastructure funding by assessing how federal assistance to states and counties responds to patterns of racial, ethnic, and class demographics; program-related needs; and local bureaucratic capacity, as expressed through 59 demographic and need-related indicators. Each of these comparisons is designed to examine whether programmatic funding is being distributed to support infrastructure development in the communities that need it—to meet our criteria for addressing a community’s needs, funds must address racial differences, economic disparities, and/or communities’ specific infrastructure conditions. Our findings can help enable federal, state, and local stakeholders assess the degree to which they are advancing the fair distribution of benefits and burdens across communities, while seeking solutions to make up gaps. This report—and its accompanying interactive tool, Spending on Infrastructure toward Equity (SITE)—is the end product of a year’s worth of data collection and analysis. 

We find that:

  • Federal programs reinforce historic patterns.
  • Many formula grants undermine the federal commitment to racial equity—but housing and community development programs may be better than others.
  • Competitive infrastructure grants are allocated to a small subset of the nation’s counties—but transportation dollars concentrate in communities of color.
  • Formula and competitive grants tend to underfund states and counties with lower household incomes.
  • Low bureaucratic capacity clearly limits counties’ ability to win grants.
  • Many infrastructure programs are addressing specific community needs.

To address the concerns raised in these findings, we recommend several key changes to the federal investment process:

  • For formula grants, Congress and federal agencies should review program formulas to align funding flows to communities based on current conditions. Congress and federal agencies should reevaluate large transportation programs, in particular, to increase the equity of spending across the US.
  • Housing and community development program formulas should be reevaluated to ensure they best meet the needs and challenges of people on the ground. One key opportunity is linking the distribution of federal formula funding to meet local affirmatively furthering fair housing requirements.
  • For competitive grants, federal officials should further prioritize funding to historically disinvested communities by giving a reasonable leg up to funding applications from communities with higher shares of residents of color, places where people with low incomes, predominate, and areas with demonstrated need for infrastructure improvements.
  • The federal government, as well as the nonprofit and philanthropic sectors, should provide support to low-capacity communities to expand their ability to apply for federal grants while seeking opportunities to continually improve the grant application and review process.

While some federal departments have made strides toward aligning infrastructure funding streams with equity goals, there is still a great deal of work to be done. Our findings and recommendations offer an opportunity to improve the distribution of forthcoming infrastructure investments, such as awards in the remaining years of IIJA funding and investments made through the Inflation Reduction Act, the fiscal year 2023 omnibus, and other legislation.

Research Areas Housing Race and equity State and local finance Neighborhoods, cities, and metros
Tags Equitable development Federal budget and economy Federal housing programs and policies Infrastructure Public and private investment Race and equity in grantmaking Environmental quality and pollution Transportation Housing and the economy State programs, budgets
Policy Centers Metropolitan Housing and Communities Policy Center
Research Methods Data collection Data analysis Web application development
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