New Construction and Remodeling Generate Jobs, Business Income and More

Just as every home is important to the family that lives in it, housing is very important to local, state and national economies and accounts for about 15 percent of the nation's Gross Domestic Product. Included in that total are new construction of single-family and multifamily homes, remodeling, and the value existing homes provide to owners.

The National Association of Home Builders (NAHB) has recently completed its 800th annual impact study that estimates of the one-year impacts (including income earned during construction and the ripple effect that occurs when some of the income is spent) of building 100 single-family homes:

  • $28.7 million in local income,
  • $3.6 million in taxes and other revenue for local governments, and
  • 394 local jobs

And the annual, ongoing impacts (resulting from the home becoming occupied and the occupants participating in the local economy) are

  • $4.1 million in local income,
  • $1.0 million in taxes and other revenue for local governments, and
  • 69 local jobs

Similarly, the new estimated one-year impacts of building 100 rental apartments are

  • $11.7 million in local income,
  • $2.2 million in taxes and other revenue for local governments, and
  • 161 local jobs

While the annual ongoing impacts are

  • $2.6 million in local income,
  • $503,000 in taxes and other revenue for local governments, and
  • 44 local jobs

Finally, the one-year impacts of spending $1 million on residential remodeling in the typical local area are estimated at

  • $841,000 in local income,
  • $71,000 in taxes and other revenue for local governments, and
  • 11 and a half local jobs

Because remodeled homes are in general occupied before the remodeling takes place, the annual local impacts are limited to

  • $11,000 in residential property taxes

The job estimates are measured in full-time equivalents-i.e., enough work to keep one worker employed full-time for a year.  Other details are summarized in a HousingEconomics.com Special Study (link to http://www.nahb.org/generic.aspx?sectionID=734&genericContentID=243689&channelID=311), which also gives a quick overview of the methodology NAHB used to generate the estimates.

Moreover, the employment effects of new home construction and remodeling extend far beyond the physical structure. About half of the jobs created by building new homes are in construction.  They include framers, electricians, plumbers, finish carpenters and all of the other workers who contribute to preparing the land and building the home.

The rest are in housing-related industries that produce building materials and provide services to home builders, buyers and owners. These include: furniture and appliance industries; metals and plastics; architecture and engineering; real estate agents, brokers, finance and insurance; wood products, concrete and gypsum; construction equipment and other products; selling, moving and storing products; and management, administration, government and legal services.

Housing has been a major contributor to the economy historically and, following the downturn of the past, is making a steady comeback.  We must recognize the importance of the nation's home building industry in spurring and sustaining economic growth.  Home building is vital to achieve job growth, build healthy communities and move our economy forward.

Sincerely,

Mari McAllister-Charles, Executive Officer
BROWN COUNTY HOME BUILDERS ASSN.


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