[1]Single-family homebuilding activity adds millions to local economies and, on average, hundreds of new jobs, according to the latest look by the National Association of Homebuilders [2] into the economic impact of residential construction.
On Thursday, the NAHB released “The Economic Impact of Home Building in a Typical Local Area [3],” which looks at income and job creation and the tax benefits generated whenever new homes are built‒‒or, as the report puts it, “the ripple impact that occurs when income earned from construction activity is spent and recycles in the local economy.”
According to the findings, construction of 100 single-family homes pumps an average of $28.7 million in income into a typical local economy in the first year. This, the NAHB says, adds $3.6 million to local tax rolls while providing 394 new jobs. Annually recurring benefits after construction is completed, on average, generate $4.1 million in local income, $1 million in taxes, and 69 local jobs.
“These are ongoing, annual local impacts that result from the new homes becoming occupied, and the occupants paying taxes and otherwise participating in the local economy year after year,” the report states. These “ongoing impacts” also factor in property tax hikes, and are based on homes that will be valued at an average price of $378,000.
The study also looks at the effects of multi-family construction and residential modeling. According to the NAHB, typical multi-family construction generates $11.7 million in local income, $2.2 million in taxes, and 161 local jobs. Meanwhile, in communities where residents typically spend at least $1 million on remodeling, construction will generate $841,000 in income, $71,000 in taxes, and 11 local jobs.
Additionally, because remodeled homes generally are occupied before any remodeling takes place, the annual local impacts are typically about $11,000 in residential property taxes. Job estimates are measured in full-time equivalents—i.e., enough work to keep one worker employed full-time for a year, the report states.