Recent N.C. State Study Concludes Residential Construction is an Important Part of Local Economy
The Home Builders Association of Raleigh-Wake County confirms the positive role of local housing through the release of a new report entitled, “Economic Impacts of Residential Construction in Wake County,” conducted by Dr. Michael L. Walden, a project director and William Neal Reynolds Distinguished Professor at NC State University.
The report concludes that residential construction and the resulting activities by new homeowners are an important part of the Wake County economy. There is an indirect supply chain from residential construction out through the occupancy of new homes that infiltrates spending in other economic industries. Housing pays for itself because each new home built provides both a direct and indirect benefit to the local economy.
“I am pleased to see that this study confirms what we in the home building industry witness on a daily basis,” said Glenn White, president of Complete Construction Company, Inc. and 2015 president of the Raleigh-Wake HBA. “Housing does create jobs, positively impacts our local economy beyond just the construction process, and generates revenue throughout the local governments in Wake County.”
The study completed in May estimates the economic impact of residential construction of owner-occupied units in Wake County and was commissioned by the HBA in an effort to evaluate the housing industry’s role in the local economy. It is an update to the original study completed by Walden in 2005.
The economic impact defined in the study is through the creation of both jobs and income in Wake County by residential construction during 2013. The impact is broken down between the construction phase and the occupancy phase.
For 100 detached homes, the construction phase resulted in $19.7 million of new income and 132 jobs. The occupancy phase resulted in $10 million of new income and 104 permanent jobs.
For 100 attached homes, the construction phase resulted in $18.7 million of new income and 125 jobs in Wake County. The occupancy phase resulted in $9.4 million of annual income and 98 permanent jobs.
“When both the construction and occupancy of residential units as well as their business and supply chain impacts are considered, the estimated local public sector revenues slightly exceed local public sector costs in 2013 for detached units, and local public sector revenues significantly exceed local public sector costs in 2013 for attached units,” Walden said.
A copy of the study can be found online at http://www.hbawake.com/site/publisher/files/wakehousingimpact2015.pdf
In April 2015, the National Association of Home Builders released a number of reports related to the local economic impact of home building, including one entitled, “The Economic Impact of Home Building in a Typical State: Income, Jobs, and Taxes Generated.” The reports detailed a model NAHB developed to estimate the economic benefits that are generated by home building, including new income and jobs for residents and additional revenue for local governments. These can be accessed at http://www.nahb.org/en/research/housing-economics/housings-economic-impact/the-local-economic-impact-of-home-building.aspx
The NAHB models detail that average-value residential construction pays for itself and begins generating surplus revenue for local governments within the first year of construction.
The national association has previously released estimates that show that building an average single-family home generates 2.97 jobs, measured in full-time equivalents (enough work to keep one worker employed for a year) and $110,957 in taxes.