Study Shows Housing Industry is Vital to California’s Economic Recovery
SACRAMENTO, CA – February 12, 2010 – (RealEstateRama) — A preliminary report released today by the California Homebuilding Foundation (CHF) in conjunction with the Center for Strategic Economic Research (CSER), shows that the downturn in new-home building has resulted in the loss of hundreds of thousands of jobs and tens of billions of dollars in economic output to California’s economy.
The report, The Economic Benefits of Housing, details the role the housing industry plays in the economic health of California and was conducted as the fourth update to a report first commissioned in 2003. CSER analyzed construction and market data from around the state and quantified the impact of California’s construction sector to the state’s economy.
“It has never been more evident that we must revive the housing industry in order to revive California’s economy,” said Liz Snow, CBIA’s President and CEO. “The fact that the housing industry has lost over 400,000 jobs since 2005 should send a clear signal to lawmakers that our industry is vital to the state’s economic recovery and prosperity.”
Preliminary numbers from the report found that new housing construction in California contributed $14.3 billion dollars to the state’s economy in 2009 and supported nearly 80,000 jobs, representing just a fraction of the $67.7 billion dollars and 487,000 jobs that the industry had contributed in 2005.
The report also found that every dollar spent on new housing construction in California generates another $0.8 in total economic activity and that each job created through residential construction supports an additional 1.2 jobs.
CSER’s Director, Ryan Sharp, emphasized that “the economic benefits of new housing construction reach well beyond the residential construction sector, affecting a wide range of linked sectors and creating an even greater impact on the California economy.” Other sectors in the state that benefit considerably from new housing construction include Wholesale Trade; Architecture, Engineering, & Related Services; and Real Estate.
Snow noted that the economic benefits of housing would be even more profound if homebuilding levels had kept pace with estimated demand.
“The report concludes that if we were building the 220,000 housing units per year to meet the estimated demand according to the Department of Housing and Community Development, California would have seen an additional economic benefit of close to $73.3 billion of output and 407,000 jobs in 2009,” said Snow. “We hope state lawmakers recognize the impact the state homebuyer tax credit had on homebuilding last year and will approve the homebuyer tax credit proposed for 2010. Approving the tax credit legislation will reinvigorate the housing market, revive job-generating home construction, and put our state back on track to economic recovery.”
The report released today is preliminary with actual figures for 2008 and estimated figures for 2009 from the Construction Industry Research Board (CIRB). The full report with actual figures for 2009 and economic benefits broken down by county will be available later this year.
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The California Building Industry Association is a statewide trade association representing thousands of homebuilders, remodelers, subcontractors, architects, engineers, designers, and other industry professionals. More information is available on the Association’s Web site, www.cbia.org.
The Center for Strategic Economic Research (CSER) is an economic research and consulting group specializing in applied research and strategy development in the regional economics and economic development fields. The organization has been engaged in economic research activities for over 30 years, originally as a research institute affiliated with California State University, Sacramento, known as the Real Estate and Land Use Institute (RELUI), and later as the Sacramento Regional Research Institute (SRRI). To learn more about CSER, visit www.strategiceconomicresearch.org.
The California Homebuilding Foundation (CHF) is the research and education information center for California’s building and construction industries. The Foundation serves the homebuilding industry by providing research and scholarships through its endowments, educational and professional development programs, and recognition of homebuilding professionals. For more information, visit the Foundation’s Web site at www.mychf.org
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Media Contact:
Michael Castillo
Communications Manager
(916) 443-7933 ext. 346
mcastillo (at) cbia (dot) org
