June 25, 2009
Builders contribute more to the local economy than you might think
By ALLISON BUTCHER
MBA of King and Snohomish Counties
A new pastime has developed in the last few months watching the up and down, back and forth of various economic indicators. While policymakers debate solutions and the impact of various industries, it is important to remember residential construction (the building of single-family houses, condos and apartments) is a vital sector in our local economy.
Even while acknowledging the housing market has had its ups and downs over the last 10 years, economic surveys indicate that a stable, robust home building market plays a critical role in our economic health. And with housing-focused solutions that will inevitably come from the current recession, this important economic engine will help power our economy forward.
The construction of new homes produces tangible and documented benefits to local economies. Home building creates employment, sustains job growth, boosts consumer confidence and spending, and yields ongoing benefits to the private and public sectors.
Employment and jobs
According to a study by economists with the National Association of Home Builders, new home construction in King and Snohomish counties generates jobs for local workers, local revenues and fees, and ongoing revenue to our communities.
Approximately 75 percent of the homes built in these two counties are built by small builders companies that build fewer than 50 homes per year. These small, local companies employ local workers or local subcontractors. These wages and profits stay in our communities where they produce continued economic benefits for all of us.
According to the study, construction of 100 single-family homes in King and Snohomish counties generates:
• 311 local jobs in construction and construction-related industries
• Approximately $18.1 million in local income
• More than $2.8 million in local revenues and fees
Construction of 100 multifamily homes generates:
• 188 local jobs in construction and related industries
• Approximately $11.3 million in local income
• More than $1.4 million in local tax revenues and fees
The benefits of the new construction don’t stop once the house is built and sold.
Consider the typical new owners of any home. They want to make their new home theirs. That is, change the décor, find new furnishings and adapt the home’s ambience to their own lifestyle and family needs.
Each new homeowner spends an average of $8,900 to furnish, decorate and improve their homes in the first 12 months after their purchase. More than double what is spent by non-movers!
The report also highlights the ongoing, annual local impacts of home building in the Seattle metro area in terms of local income, revenue and jobs. This represents the impacts that result from the new homes being occupied and the occupants paying taxes and otherwise participating in the local economy year after year.
The annual recurring impacts of building 100 single family homes in the Seattle metro area include:
• $3.7 million in local income
• $808,000 in taxes and other revenue for local governments
• 68 local jobs
The annual recurring impacts of building 100 multifamily units include:
• $3 million in local income
• $650,000 in taxes and other revenue for local governments
• 53 local jobs
Taken as a whole, housing’s economic engine contributes to substantial revenues far beyond the home building industry. These benefits last indefinitely as people come to live and work where the homes are available. Overall, home building contributes to a healthy job market and helps fund valuable local services, such as schools, parks and other community activities.
Local government steps in
Several local jurisdictions in our region recognize it is in our collective best interest to restore a healthy housing industry and have taken constructive steps to ease the effects of the recession, at little or no cost to taxpayers. For example, some cities and counties have agreed to extend approved preliminary plats, short plats and building permits. By taking these steps, local jurisdictions have acknowledged that to the extent we can help housing, the region will be in a better position for economic recovery.
We will come out of the current recession a stronger industry. And from the available economic data, we know that a vibrant housing market that features a variety of affordable housing choices reaches beyond the American dream of home ownership. It becomes a positive, stabilizing economic force for our community.
Copyright ©2009 Seattle Daily Journal and DJC.COM.
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