As the U.S. economy struggles under the burden of the coronavirus pandemic, economists are discussing how a recovery might unfold once social distancing and other measures begin to succeed. A recent NAHB article illustrates the role home building can play in a recovery by generating jobs.
The article published updated estimates of the national economic impact of home building. The new estimates show that building an average single-family home generates 2.90 jobs, measured in full-time equivalents (enough work to keep one worker employed for a year).
Wages and profits are subject to a variety of taxes and fees. The national impacts of building an average single-family home include $86,759 in federal taxes and $42,888 in state and local fees and taxes, for a total of $129,647 in revenue for governments at all levels.
Similarly, the article shows that building an average rental apartment generates 1.25 (full-time equivalent) jobs; as well as $37,363 in federal taxes and $18,546 in state and local fees and taxes, for a total of $55,909 in revenue for governments at all levels. For more details and assumptions used to produce the above estimates, consult the full article.
As the tables above show, the national economic impacts of home building include a substantial number of jobs for construction workers, but also jobs in firms that manufacture building products, transport and sell products, and provide professional services to home builders and buyers (e.g., architects and real estate agents).
The tables also show that, in industries like construction and real estate, substantial revenue is generated to support for business proprietors. Included in this category are many construction subcontractors and real estate brokers with relatively modest incomes, who are organized as independent contractors and therefore not technically counted among the jobs in government accounting systems. In summary, home building generates jobs in industries like construction and manufacturing, jobs for highly educated professionals like engineers and financiers, and revenue to support owners of small businesses like construction trade contractors. This is an attractive mix of entities to support in a healthy national economy, especially during a period of recovery.