Home building and remodeling generate significant economic benefits. Since May is National Home Remodeling month, we thought we would look at the economic benefits remodeling activity has on the community where it takes place.
According to NAHB estimates, for typical remodeling projects, every $10 million of total remodeling activity in an area generates:
- 78 local jobs
- $6.9 million local wage and business income
- $577,000 in taxes and fees for local governments
The ongoing effects include an additional $100,000 in residential property tax revenue for local jurisdictions through the improved value of homes.
The jobs impact in particular is worth noting, as net job loss in the residential construction sector due to the Great Recession currently stands at 1.41 million.
All in all, this is a reminder that housing equals jobs.
To derive these impacts, NAHB has developed a model that estimates the economic effects of various kinds of home building. 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 impacts that comes from building or improving homes in a local area.
These impacts are “local” in that they measure the benefits that accrue to individuals, businesses and governments in a given area. National economic impacts would include larger business benefits, by estimating the manufacturing effects for example, but would also have lower ongoing impacts due to residents choosing to live or remain in a given area.