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 2010 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.
Among them was Dale Barnett, sales manager for United-Bilt Homes Inc. Barnett said the number of people impacted by a home’s construction was impressive.
“There’s about 12 trades involved every time you break ground,” he said, pointing to excavators, electricians, framers, plumbers, painters and roofers. “The ripple effect of a home being built is awesome for many people.”
United-Bilt Homes operates 22 offices in the Midwest, and Barnett said fiscal 2010, ending in February, was the company’s best year on record in terms of the number of new homes built. Locally, however, he said only 10 homes were constructed. Barnett said the Springfield office expects to construct 20 in fiscal 2011, with three under way. United-Bilt was working on one home at this time last year, he said.
“I think we’ve turned the corner, really, as far as bottoming out as an industry. At least we have on our end,” Barnett said.
Eisenberg said impacts could be measured, according to the study’s 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 latter phase is less dramatic but has annual returns for the life of the home.
During the construction phase, Eisenberg’s study estimates that $87.3 million would be generated locally, supporting 1,554 jobs from the 938 homes. The ripple effect of those earnings and collected taxes would produce roughly $41 million. And through the lifetime of the homes, $23.3 million a year is expected to trickle into the economy 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, the 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 area data he collected and calculated on assumptions that single-family homes would sell for $190,386 on average, on lots worth an average of $5,500. The results also assume home builders paid local governments an average of $2,699 in impact fees and permits 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.
Sam Bradley, owner of Sam Bradley Homes, said he has seen more interest in home construction in the first half of 2011 then he did in all of 2010. He said his company is not currently constructing any houses, but he is in the middle of four remodeling projects.
Bradley, a Springfield HBA past president and NAHB board member, said the size of his subcontractor and vendor database gives a good indication of how many people can be impacted by the construction of a home.
“That has somewhere between 400 and 500 people in it,” Bradley said, adding that he may only have two electricians working on a new home, but each one has on office of personnel that supports the workers.[[In-content Ad]]
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