ECONOMIC IMPACT STUDY SHOWS HOME BUILDING PAYS ITS WAY IN STATE OF WISCONSIN

(MADISON-Feb. 4, 2010)
An economic impact study conducted by the National Association of Home Builders (NAHB) Housing Policy Department shows that the home building industry in the state of Wisconsin not only pays for itself, but its impact includes new income and jobs for Wisconsinites and additional revenue for state and local governments.

Every 1,000 single-family homes built in Wisconsin in 2010 will generate a cumulative $209.5 million in revenue, compared to only $195.6 million in costs over the next 15 years. By the end of the first year the housing industry’s economic impact more than offsets the fiscal costs, resulting in a fiscal surplus to state and local governments.  Moreover, by the end of the very first year the fiscal surpluses are more than enough to pay off all debt and result in a surplus available to pay for additional government services. Collectively new single-family housing produces a net income to state and local governments of $7.4 million in the first year, and $475,000 each and every year thereafter.

“These results show that home building is more than paying its own way and should put to rest the notion that existing home owners are subsidizing new home construction here in the state of Wisconsin,” said Dr. Elliot Eisenberg, (202) 306-2731) the NAHB Senior Economist who conducted the analysis of the impact of home building here in Wisconsin.  “This is an excellent result and tells me that local residents should be thanking the building industry for footing the bill for a lot of city, county and state services.”

The economic impact study looks at the impact of the construction industry in three phases: the construction phase; the ripple effect and the occupancy phase. The impact of the three phases are added up, and then compared to the cost of services such as education, fire, police, utilities, parks and recreation and roads that are required to support the new housing units.

 During the construction phase, the building of every 1,000 single-family homes creates 2,043 jobs (1,412 jobs in construction alone), generates $15.2 million in state and local taxes and $117.0 million of state and local income in the first year. The ripple effect of those homes, which includes the wages and profits local area residents earn during the construction period that are spent on other state and local goods and services, results in another 1,213 jobs, $14.7  million in state and local taxes and $63.6 million in state and local income, also in the first year.  The ongoing annual effect of those homes, which includes state and local jobs, income and taxes generated as a result of the home being occupied, is 690 jobs, $12.4 million in state local taxes and $34.1 million in state and local income per year. 

“It is important for us to look closely at these numbers,” said 2009 WBA President Doug Scott. “We’ve been saying for a long time that home builders are doing their part to build community, and these numbers show that we are a very important player in the overall economic health of our state and local economies.”

The NAHB model used to determine the economic impact of the housing industry was first developed by NAHB in 1997 and has been applied to construction in more than 525 areas of the country. This study looks at economic impact of building 1,000 average priced single family homes across the entire state of Wisconsin in 2006 through 2008. 

Click Here for a copy of the study for Wisconsin. For more information or comments, contact WBA Director of Government & Political Affairs  Brad Boycks (608) 242-5151 x 16

Power Point Slides from Elliot Eisenberg's presentation to WBA Board of Directors February, 2010
Press Release 2.10.2010

Home Builders Association Economic Impact Studies done for other counties in Wisconsin:
Brown County HBA 2009 (Brown, Kewaunee, Marinette, Souther Oconto counties)
Full Study. Part 1: Economic Impact of Home Building.  Part 2: Comparing Costs to Revenue for Local Governments.

Chippewa Valley HBA 2011 (Buffalo, Chippewa, Dunn, Eau Claire, Pepin counties)
Full Study. Part 1: Economic Impact of Home Building.  Part 2: Comparing Costs to Revenue for Local Governments.
 

La Crosse Area Builders Association 2008 (Jackson, La Crosse, Monroe, Trempealeau, Vernon counties)
Full Study. Part 1: Economic Impact of Home Building. Part 2: Comparing Costs to Revenue for Local Government

Lakeland Builders Association 2009 (Walworth county)
Full Study. Part 1: Economic Impact of Home Building. Part 2: Comparing Costs to Revenue for Local Government

Madison Area Builders Association  2007 (Dane county)
Full Study. Part 1: Economic Impact of Home Building. Part 2: Comparing Costs to Revenue for Local Government

Manitowoc County HBA 2008 (Manitowoc county)
Full Study. Part 1: Economic Impact of Home Building. Part 2: Comparing Costs to Revenue for Local Government

St. Croix Valley HBA 2007 (Pierce, Polk, St. Croix counties)
Full Study. Part 1: Economic Impact of Home Building. Part 2: Comparing Costs to Revenue for Local Government

Valley Home Builders Association 2006 (Outagamie county)
Full Study. Part 1: Economic Impact of Home Building. Part 2: Comparing Costs to Revenue for Local Government

Winnebago HBA 2010 (Winnebago county)
Part 1: Economic Impact of Home Building. Part 2: Comparing Costs to Revenue for Local Government