Building Apartments/Condos Generates Jobs for Residents and Revenue for Communities, Says NAHB Report

By Anuradha Kher, Online News EditorWashington, D.C.–Home building generates substantial local economic activity, including new income and jobs for residents, and additional revenue for local governments, according to the National Association of Home Builders (NAHB), which has developed a model to estimate the economic benefits. The model captures the effect of the construction activity itself, the ripple impact that occurs when income earned from construction activity is spent and recycles in the local economy, and the ongoing impact that results from new homes becoming occupied by residents who pay taxes and buy locally produced goods and services.”To fully understand the positive impact of multifamily construction, it’s important to recognize the economic ripple effects and ongoing benefits to the community at large,” says NAHB Chairman Joe Robson.The estimated one-year metro area impacts of building 100 rental apartments in a typical metro area include $7.9 million in local income, $827,000 in taxes and other revenue for local governments, and 122 local jobs. In addition, the area would see annually recurring impacts of $2.3 million in local income, $395,000 in taxes and other revenue for local governments, and 32 local jobs. The above impacts were calculated assuming the units have an average market value of $120,000 and some other factors. The report also found that the estimated one-year local impacts of building 100 multifamily condominiums in a typical metropolitan area include $20.9 million in local income, $2.2 million in taxes and other revenue for local governments, and 319 local jobs. The annually recurring impacts of building 100 multifamily condominiums are $2.9 million in local income, $705,000 in taxes and other revenue for local governments and 49 local jobs.These impacts were calculated assuming that new multifamily condominiums built in the typical metropolitan area each have an average market value of $308,000 and some other factors. “There is continued demand for close-in housing in major metro areas, and apartments and condos not only can fill that need, but also can help jump-start local economies,” says NAHB Chief Economist David Crowe. “The initial impact and the ongoing ripple effect from added employment and tax revenue can make encouraging multifamily development a winning strategy for local governments.”