By Ali Sahabi of Optimum Group, LLC
President, Building Industry Association (BIA) Baldy View Chapter
April is National New Homes Month, a time in which America devotes an entire month to celebrate new homebuilding and all of the benefits new home construction brings to homebuyers and their communities. We celebrate because not only does new homebuilding make the safest, most durable and most environmentally friendly homes ever built available, but it creates important jobs and revenue streams for the communities in which we live.
Today, the vast majority of new homes are built as part of new home communities, which like the homes themselves are state-of-the-art since homebuilders construct the communities with the latest in designs, materials and techniques available. These communities are also designed in conjunction with local public agencies to include parks, libraries, schools and open spaces to enhance their communities.
Another important aspect of new home building is that new it accommodates California’s growing population. According to recent reports, the vast majority of Californians who will be seeking housing in the future will be “homegrown” or native-born. That means that the bulk of tomorrow’s homebuyers will be the children of today’s homeowners.
In a single year, building new home communities can infuse millions of dollars into city or county governments and create and sustain hundreds of new jobs. According to The Economic Impact of Home Building in a Typical Local Area Income, Jobs, and Taxes Generated released last year by the National Association of Home Builders (NAHB), the estimated one-year impact of building 100 single-family homes in a typical local area include $28.7 million in local income, $3.6 million in taxes and other revenue for local governments and 394 local jobs. The additional, annually recurring impacts of building 100 single-family homes in a typical local area include $4.1 million in local income, $1 million in taxes and other revenue for local governments, and 69 local jobs.
The estimated one-year impact of building 100 rental apartment homes in a typical local area includes $11.7 million in local income, $2.2 million in taxes and other revenue for local governments, and 161 local jobs. The additional, annually recurring impacts of building 100 rental apartments in a typical local area include $2.6 million in local income, $503,000 in taxes and other revenue for local governments, and 44 local jobs.
New home construction accounts for over 1.1 percent of California’s total output and ranking among the top 10 percent of all industries according to The Economic Benefits of Housing report by the Center for Strategic Economic Research (CSER) in conjunction with the California Homebuilding Foundation (CHF). It states that “(t)aking into account the full range of economic impacts, new housing construction contributes more than $38.6 billion per year to the California economy and supports over 209,000 jobs statewide on an annual basis, based on 2013 new housing unit permit numbers.”
The report states that nearly half of the $18.3 billion economic output of homebuilding is direct result of new housing construction and the roughly $20.3 billion balance is generated by “those sectors which supply goods and services to the residential construction industry as well as the spending activities of the employees of the construction industry and its supplier sectors.”
That means that every dollar spent on new homebuilding in California generates yet another $1.10 in overall economic activity while indirectly generating 1.4 jobs for every job created directly by building homes.
Add these benefits to the fact that for most Americans, their home is the biggest and best investment they will ever make and will serve as the cornerstone to their personal wealth and you can see why new home building certainly merits a month of celebration.
The BIA Baldy View Chapter seeks to advance the opportunity to attain the American Dream of home ownership. For additional information on homebuying, home improvements or the benefits of homeownership, go to www.biabuild.com.