Opportunities and Challenges for Transportation Infrastructure Policy in 2026

Jack Hargrove for Market Share Blog | February 18, 2026

To ensure commercial real estate developers can build the communities of our future, all levels of government must ensure proper maintenance of and investment into transportation infrastructure. Whether in the form of highways, roads, freight rail, ports or public transit, transportation infrastructure helps regions meet their economic potential. A lack of coordination between the levels of government and internationally poses a threat to major infrastructure projects, which require years of planning and stability to complete. However, recent regional success stories provide reasons to be optimistic about the future of transportation infrastructure. Going forward, state and local governments have the opportunity to follow their lead. As for the federal government, one of NAIOP’s three federal priorities for 2026 is for Congress to pass a multiyear authorization of surface transportation programs before they expire on Sept. 30.

One high-profile instance of disruption to a vital transportation infrastructure project is the standing of the Gateway Hudson Tunnel project since October 2025. This project began in 2011 with the goal of building a new tunnel for rail on the Northeast Corridor line between New Jersey and Manhattan to replace the century-old North Tunnel. When Hurricane Sandy severely damaged the North Tunnel the following year, the need for the Gateway Hudson Tunnel intensified. By 2023, the federal government had committed $12 billion of the project’s estimated $16 billion price tag, largely through the bipartisan Infrastructure Investment and Jobs Act, and construction began.

However, when the longest government shutdown in history began in October 2025, the Office of Management and Budget immediately withheld all federal funding for the project. Funding remained frozen when the government returned in November, causing construction to halt on Feb. 5. Leaders from NAIOP’s New York City Metro and New Jersey chapters, along with other CRE industry leaders, signed onto a letter to the Trump administration requesting funds be released immediately. The Northeast Corridor supports 20% of national GDP, while the current dilapidated tunnel carries 200,000 commuters every day, making this project vitally important for economic development in the region. Thankfully, a judge ordered the funds unfrozen a day after construction stopped, and an appeals court rejected the administration’s emergency stay, resulting in the disbursement of $30 million on Feb. 14. Still, court cases are ongoing, resulting in uncertainty over billions of dollars of funding for a vital, decades-long project.