An economist for the National Association of Home Builders released the findings of a study that examined the economic impact of residential construction last year on the Springfield metropolitan statistical area at the May 25 Ozarks Regional Housing and Construction Conference.
Elliot Eisenberg, senior economist for NAHB and keynote speaker at the conference presented by the Home Builders Association of Greater Springfield, said the economic impact of the 938 homes built in the five-county Springfield MSA would generate more than $150 million in income and local taxes for the area economy.
“This is why it’s so critical that we get this industry back on its feet,” Eisenberg told a crowd of 50 in the construction industry and public sector at the Ramada Oasis Convention Center on North Glenstone Avenue.
During the construction phase, the study estimates that $87.3 million would be generated locally, supporting 1,554 jobs. The ripple effect of those earnings and collected taxes would produce roughly $41 million. And through the lifetime of the home, $23.3 million is expected to be added to the economy annually from occupants.
“Let’s not forget that 2010 was not a humdinger of a year,” Eisenberg said. “If you did this same study in 2005 or 2006, you could triple these numbers.”
He said a national model first developed in 1996 was applied to local data provided by the Christian County Assessor’s office, the city of Nixa, the Greater Springfield Board of Realtors, the Greene County Assessor’s office, Greene County Auditor’s office, Market Graphics Research, the Missouri Department of Revenue and the U.S. Census Bureau.
Eisenberg was commissioned for the study by the Springfield HBA after meeting with the group in November. His findings were based on calculations from the data he collected on the area and assumed that single-family homes built in the Springfield MSA would sell for an average price of $190,386 and are built on lots worth an average of $5,500. The results also assume home builders paid an average of $2,699 in impact, permit and other fees to local governments and the homes generate an annual property tax of $1,867 per year.
According to information distributed at the event, more than 600 reports have been produced for metropolitan areas, nonmetropolitan counties and states on the economic impact of home building since the model was developed.
Eisenberg said impacts could be measured, according to the model, in three phases: construction, ripple and occupancy. The first two are relatively short in duration, only impacting the local economy for about a year, while the occupancy phase is less dramatic but has annual returns for the life of the home.
He said home construction is one of only a few industries to have such a dramatic effect on the economy due to the various other jobs it supports. Eisenberg said health care, automobile manufacturing and government sectors also have similar impacts. [[In-content Ad]]