An economic impact study conducted by the National Association of Home Builders (NAHB) Housing Policy Department shows that the home building industry in Greater Tulsa not only pays for itself, its economic impact results in new income and jobs for Oklahomans and additional revenue for local governments. Local home builders are doing their part to build community, and these numbers show that we are a very important player in the overall economic health of Tulsa's economy.
Every 1,761 single-family homes built across all seven counties in Greater Tulsa in 2011 will generate a cumulative $169.6 million in revenue, compared to only $127.5 million in costs over the next 15 years. By the end of the second year the housing industry’s economic impacts more than offset the fiscal costs resulting in a fiscal surplus to local governments. And, by the end of the third year the fiscal surpluses are more than enough to pay off all debt and result in a surplus available to pay for additional government services. Collectively new single-family housing produces a net income to local governments of $3,314,100 in the third year, and $3,379,000 each and every year thereafter.
The economic impact study looks at the impact of the construction industry in three phases: the construction phase; the ripple effect; and, the occupancy phase. The impact of the three phases are added up, and then compared to the cost of services such as education, fire, police, utilities, parks and recreation and roads that are required to support the new housing units.
During the construction phase, the building of every 1,761 single-family homes creates 3,217 jobs (2,226 jobs in construction alone), generates $17.4 million in local taxes and $220.8 million of local income in the first year. The ripple effect of those homes, which includes the wages and profits local area residents earn during the construction period that are spent on other local goods and services, results in another 1,641 jobs, $9.6 million in local taxes and $104.5 million in local income, also in the first year. The ongoing annual effect of those homes, which includes local jobs, income and taxes generated as a result of the home being occupied, is 811 jobs, $9.8 million in local taxes and $48.4 million in local income per year.
The NAHB model used to determine the economic impact of the housing industry was first developed by NAHB in 1997 and has been applied to construction in more than 600 areas of the country. This study looks at economic impact of building 1,761 average priced single family homes across all seven counties in Greater Tulsa in 2011.
Click below for a complete copy of the two sections of the report.
REPORT: This document looks at the economic benefits of new home construction in terms of new jobs, new taxes and additional local income generated. It looks at these benefits during the construction phase, the ripple phase and the on-going occupancy phase.
COSTS: This document looks at the NET benefits of the same construction activity. That is, it takes the benefit data from the REPORT document as a given and then subtracts from it the new annual costs associated with the new homes (teachers and firemen) as well as the one time costs (new roads and a bigger sewer system) to arrive at the NET benefit of new construction activity to the community. And, in this process answers the question of whether or not new housing pays its way. And, big surprise, it does!
Tulsa's results show that housing pays its way very fast; less than three years. See Page 6 in the COSTS report for the details.