15 Economic Benefits of New Home Construction
The impact new home builders have on local economies goes way beyond construction job growth. The below new home construction economic benefits detail some of the most important ways homebuilding can help positively grow a local economy.
- According to economists at the National Association of Home Builders, the one-year estimated local impacts of building 100 single-family homes in a typical metro area include $21.1 million in local income, $2.2 million in taxes and other local government revenue, and 324 local jobs. (From: Metropolitan Builders Association “New Homes Benefit More Than Just Buyers”)
http://www.mbaonline.org/NewHomesMonth/economic-benefits.html - When families move into a new community and buy a new house, they will likely shop at local stores to buy furniture and accessories to decorate the home. They will fill their car’s gas tank at local gas stations so they can get to the stores, have local mechanics work on the car when it breaks down or needs the oil changed, or buy a new car at a local dealer when it’s time to replace the old one. These are new consumers in the area, that otherwise wouldn’t be there if they hadn’t bought/built a brand new home. (From: Metropolitan Builders Association “New Homes Benefit More Than Just Buyers”) http://www.mbaonline.org/NewHomesMonth/economic-benefits.html
- Children of these homes will enroll in local schools. This increases enrollment, meaning more teachers, janitors, cafeteria workers and other school support staff will need to be hired. Those kids will also join sports leagues and other activities, buy equipment and pay registration fees that provide stipends for referees and coaches. (From: Metropolitan Builders Association “New Homes Benefit More Than Just Buyers”) http://www.mbaonline.org/NewHomesMonth/economic-benefits.html
- This new economic activity puts income into the pockets of local business owners and their families, who can then afford to go out and spend money themselves, which recycles even more money into the community’s economy. (From: Metropolitan Builders Association “New Homes Benefit More Than Just Buyers”) http://www.mbaonline.org/NewHomesMonth/economic-benefits.html
- The new families also pays local and state taxes. These tax revenues help pay for a wide range of government services, including school teachers, police departments, refuse collection, parks maintenance and road repairs. (From: Metropolitan Builders Association “New Homes Benefit More Than Just Buyers”) http://www.mbaonline.org/NewHomesMonth/economic-benefits.html
- Over the long term, as the families who move into new homes become part of the community, their positive impact continues. NAHB estimates that those 100 new homes also provide the community with additional, annually-recurring impacts of $3.1 million in local income, $743,000 in taxes and other revenue for local governments, and 53 local jobs. (From: Metropolitan Builders Association “New Homes Benefit More Than Just Buyers”) http://www.mbaonline.org/NewHomesMonth/economic-benefits.html
- New home projects create job opportunities for workers in the construction industry. http://housingtrustfundproject.org/wp-content/uploads/2011/10/2009.02.17-Final-Report-Text2.pdf
- New home projects create job opportunities for those in the manufacturing activities that support and supply housing: Wood products for framing, flooring and trim; concrete, equipment for heating and cooling, new or recycled roofing products. http://housingtrustfundproject.org/wp-content/uploads/2011/10/2009.02.17-Final-Report-Text2.pdf
- Jobs are generated in the process of transportation, storing and selling the goods needed to complete these projects.
- Creates more jobs/work for professionals such as architects, engineers, real estate agents, lawyers, and accountants who provide services to home builders, home buyers, and remodelers. http://www.nahb.org/generic.aspx?sectionID=784&genericContentID=227858
- The wages of the construction employees are taxed as well as the builders, manufacturers or goods and other services are taxed on their revenue. http://www.nahb.org/generic.aspx?sectionID=784&genericContentID=227858
- States often impose sales taxes on material sold to home builders, and many local jurisdictions levy fees for approving building permits and extending utility services. http://www.nahb.org/generic.aspx?sectionID=734&genericContentID=103543&channelID=311
- Housing stimulus measures, such as the recently enacted Housing and Economic Recovery Act, which included a landmark $7,500 tax credit for first-time home buyers. http://www.nahb.org/generic.aspx?sectionID=734&genericContentID=103543&channelID=311
- It may be that an average new-home household moves into the newly constructed unit from elsewhere in the same local area, while average existing-home household moves in from outside to occupy the unit vacated by the first household. Alternatively, it may be that the new home allows the local area to retain a household that would otherwise move out of the area for lack of suitable housing. (Page 24) http://www.nahb.org/fileUpload_details.aspx?contentTypeID=3&contentID=35601&subContentID=219188
- Increased payments to utility companies, that otherwise would not have existed. http://www.nahb.org/fileUpload_details.aspx?contentTypeID=3&contentID=35601&subContentID=219188
