Following Britain’s vote last month to leave the European Union, investors have been moving cash into “safe havens,” such as U.S. Treasury bonds. That surging demand for reliable investments has sent interest rates down to record lows. But local governments may not be able to take advantage of cheap money for infrastructure repairs.

Transcript

ARI SHAPIRO, HOST:

Since Britain voted to leave the European Union, investors have been moving cash to safe havens like U.S. Treasury bonds. The demand for bonds has pushed down interest rates, and that should be good news for state and local governments that need cheap money to fix roads, bridges and other infrastructure. But as Charles Lane of member station WSHU reports, few of them are taking advantage of the opportunity.

CHARLES LANE, BYLINE: At its widest part, New York’s Hudson River slows down to a glassy drift beneath the cliffs of the Palisades. Here, about 25 miles north of Midtown Manhattan, a dozen barge cranes are busy rebuilding the 3-mile-long Tappan Zee Bridge.

SANDRA BLEJER: It’s sort of like modern-day dinosaurs. They look small, but when you get up close or by the bridge and you look at them, they’re actually quite massive.

LANE: Sandra Blejer, a retired medical manager, walks out here most mornings and marvels at the $4 billion project that has been taking shape on giant pillar at a time.

BLEJER: All up and down the Hudson River, there’s places where things are being prepared and then boated down, and it’s just an incredible feat to watch being built.

LANE: Financing the project was no small task, either. To start paying for construction, a state agency had to issue bonds worth $1.6 billion. That was three years ago when interest rates were a third higher. Matt Fabian researches bonds for Municipal Markets Analytics. He says that today’s historically low rates make this the best time ever to borrow for a bridge.

MATT FABIAN: You know, the ultimate toll that will have to be charged to people who take the bridge could be a bit lower.

LANE: It’s not just bridges. High-speed rail, airports, roads, all sorts of public infrastructure can be financed on the cheap today.

FABIAN: So corporations have been incredibly opportunistic issuing mountains of bonds of the – you know, in 2016 so far – state and local governments – not so much.

LANE: And there’s several reasons for this. First, while governments can borrow money to build bridges, they can’t borrow money to operate them. Investors aren’t going to loan city money for an airport they can’t afford to hire baggage handlers for. Robert Palter is an infrastructure expert at McKinsey and Company. He says another major risk with big projects happens at the drawing board before you even get to the bond market.

ROBERT PALTER: And it is time-consuming, and it’s very expensive because you have to incur legal fees, engineering fees, designer fees, permitting fees.

LANE: And then there’s the politics of it all. Republicans in Congress have resisted increasing federal spending to match state funding for infrastructure because they don’t want to issue additional bonds at a time when they national debt is around $19 trillion. Leading economists overwhelmingly disagree with that position. According to a poll by the University of Chicago School of Business, most economists say that it makes sense to invest in infrastructure now. But lawmakers answer to voters, and Palter says voters have not made road and bridge repair a top priority.

PALTER: Things like health care, education, debt, taxes tend to rise above solving infrastructure problems.

LANE: But there’s still time. With global growth slowing amid continued uncertainty over the Brexit, low interest rates are expected to last a long while. For NPR News, I’m Charles Lane.

Copyright © 2016 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.