|USA Prison REITs: Sector Focus|
|Monday, 29 September 2014 03:33|
Prisons: One in every 100 Americans is now living behind bars, according to a study by the Pew Center. More distressing is the fact that even though the population has increased threefold over the last 20 years, the costs associated with corrections / imprisonment have more than quadrupled over the same time period. The US currently spends USD$0.60 on correction for every USD$1.00 it spends on higher education – this reflects an increase of USD$0.28c over the last 20 years. Clearly, policy choices made over the last 2 decades have sent more offenders to prison and kept them there longer. Between 1996-2006, the US prison population increased more than 3% on average. The detention & corrections industry in the US comprises a USD$61bn opportunity. Just 7 out of every 100 prison beds are outsourced to private companies. The trend to outsource is nowhere far from saturation: in 1990, privatized beds in our nation totaled just over 10,000; today, that number is closer to 165,000. The trend could continue in the near future, but possibly accelerate.
According to the Bureau of Justice Statistics / BJS, the correctional systems of 24 States are currently running at more than 100% of their rated capacity, resulting in unsafe conditions and hindering attempts to rehabilitate inmates (and thus increase recidivism / “revolving door prison" syndrome). Furthermore, aside from States' own criminal justice systems, the Federal criminal justice system is also running at above its maximum capacity, resulting in many of the same problems. One reason is ever shrinking budgets, and there have been no meaningful public sector prison development projects for 5yrs (Corrections Corporation late-2013). Hence, prison REITs that can effectively (directly or indirectly), provide the extra capacity required, have become increasingly popular and / or accepted by politicians over the last decade or so (worldwide).
|Last Updated on Monday, 29 September 2014 04:20|