Housing - An Economic Engine for Anchorage
The homebuilding process brings a lot more to the Anchorage community than providing housing for its residents. The homebuilding industry builds up communities by creating jobs and growing local economies, and there’s data to back it up. A study by the economists at the National Association of Home Builders (NAHB) recently revealed the details behind how homebuilding helps boost Anchorage’s economy.
A study by NAHB showed the construction of 200 single-family homes in Anchorage created jobs and generated local tax revenue. These economic
benefits were delivered in three distinct phases: The construction itself, the revenue from the construction workers and the spending of the families occupying the homes.
During construction, the direct impact of the construction work on homes resulted in 396 jobs for one year and almost $2.8 million in local tax revenue. In the second phase, the income earned by workers and business owners involved in the homebuilding process is spent locally. This spending sustains another 316 jobs for one year as local enterprises benefit from the additional earnings produced by construction.
Finally, the new construction homes are occupied and those new households generate economic activity and pay taxes on a permanent basis. The study found that the spending by the families occupying these 200 homes produced 159 jobs on a permanent basis and almost $2.5 million in taxes, including $1.1 million in property tax revenue.
One key question the study aimed to answer was whether new home construction pays for itself in the long run. The economic model says that for the Anchorage area the answer is yes. Over a 15-year window, the model says that building 200 single-family homes yields $40.7 million in revenue, while the homes require $16 million in government expenditures for public services. Not only does the home construction produce a $24.7 million in fiscal surplus, but also given the significant first-year benefits of home construction in the Anchorage area, the project yields a fiscal surplus in the very first year of development.
These numbers prove an important and clear economic lesson; new home construction is a key way to grow a local economy. The construction activity itself generates measurable economic benefits. And the families that eventually live in the homes produce additional economic gains for the community. And the Anchorage Home Builders Association has the numbers to prove it.