Does home building pay its way?

NAHB economist looks at the benefits of new home construction on the local economy, governments

By Nick Peterson

The Times, Feb 25, 2010 (1 Reader comment)

ADVERTISEMENTS

When he talks about the benefit to a community of new home construction, National Association of Home Builders Senior Economist Elliot Eisenberg is quick to point out that he is not preaching a build-it-and-they-will come message.

But he does emphasize that when new home construction occurs, that construction is not a burden to local governments but, in fact, pays for itself many times over in the form of new income and jobs for local residents and additional revenue for local governments.

Eisenberg brought his message to a gathering of business Eisenberg said an economic impact study conducted by the NAHB concludes that every 1,000 single-family homes built in Washington, Clackamas and Multnomah counties in 2007 will generate a cumulative $156.5 million in revenue. That is compared to only $94.3 million in costs to local governments for services over the next 15 years.

“These results show that home building is more than paying its own way and should put to rest the notion that existing homeowners are subsidizing new home construction here in the Portland area,” Eisenberg said. “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 services.”

Eisenberg pointed out that, cumulatively, the construction industry is one of the larger employers and contributors to the local economy.

“Not many people appreciate the level of employment that goes on because of this industry,” Eisenberg said. Then in a little poke at city officials attending the meeting he added, “So, when a builder/developer comes to you and says, ‘Hey, what you’re doing may adversely affect our industry,’ I understand you may not be able to help them out, but I’d like you to at least be aware of the consequences this industry has on the local economy – it’s big. As a result, we should move carefully when thinking of what to do.”

Tigard Mayor Craig Dirksen said he really didn’t feel like that comment was directed at him or his staff.

“We’ve made a real point in Tigard of setting a policy of being development neutral — that we don’t promote it, but we don’t deter it either,” Dirksen said. “That’s not our job.”

1 | 2 Next Page >>