Housing Still Packs Local Economic Punch
Home building provides a positive financial impact for the local economy and remains a key component of economic recovery according to a report commissioned by the Home Builders Association of Greater Kansas City. The report, The Metro Area Impact of Home Building in Kansas City, was conducted by NAHB Senior Economist Elliot Eisenberg in February. Eisenberg presented the results recently to a forum including locally elected public officials, city administrators and planners, and economic development leaders.
According to the report, the estimated one-year metro area impact of building 100 single-family homes in Kansas City include $22.9 million in local income, $3.3 million in taxes and other revenue for local governments, and 319 local jobs. The additional, annually recurring impacts of building 100 single-family homes include $3.4 million in local income, $996,000 in taxes and other revenue for local governments, and 53 local jobs.
“Home building is vital to our region’s growth and prosperity,” said HBA Executive Vice President Sara Corless. “As our economy works to recover and building activity seeks to find new, normal levels, we should be considering the impact housing makes on our community.”
The report also indicates new housing pays for itself generally quickly, many times in the first year. After 15 years, the homes will generate a cumulative $17.7 million in revenue compared to $12.3 million in costs, including annual current expenses, capital investment, and interest on debt.
Last month Kansas City was added to the National Association of Home Builders/First American Improving Markets Index (IMI). The index identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment, and house prices for at least six consecutive months.
“Seeing our region added to the Improving Markets Index, combined with reports from builders and suppliers in the field, shows that we are moving in the right direction,” said Corless. “Going forward, it is important to remember the role housing plays in our local economy. Housing really is a pocketbook issue for everyone.”