It is well known that home ownership is important to the fabric of our society. But what may not be so well known is the importance housing has on the economy.

Not only is it a key engine of national gross domestic product, it creates jobs at the local level, boosts tax revenues for state and local governments and increases sales for all kinds of businesses.

According to the National Association of Home Builders, investment in housing -- that is, the creation of new subdivisions and apartment communities -- accounts for 4.3 percent of GDP. And housing sector consumption -- expenditures for housing such as monthly payments and utilities -- was responsible for 9.7 percent.

That's a total of 14 percent, a share that "has varied little over the past 50 years," says Kent Conine, a Dallas builder and first vise president of the 205,000-member trade group.

But that's not all, according to Kent Colton, a senior scholar at the Harvard Joint Center for Housing Studies, who adds that if you include all spending for furniture, appliances and the like, housing's share of GDP is something on the order of 22 percent.

At the local level, a positive economic impact is felt even before the first shovel hits the ground, and it continues for as long as the house is occupied by a household purchasing locally produced goods and services.

NAHB's computer model estimates that the construction of 100 single-family homes generates $10.7 million in new income to local businesses and workers in the year the house are built. And every year thereafter, they produce $2.9 million in income.

Building 100 new houses creates 257 jobs in the community where they are located and 75 jobs every year thereafter in support of the families who eventually occupy them. In 10 years, says Conine, the local impact is valued at $37 million.

Building 100 apartment units doesn't generate as many jobs or as much revenue, but it still has a positive impact. It produces $5.2 million in local income during the year of construction and $1.8 million each year afterwards, for a total of $23 million over a 10-year period.

As far as work is concerned, building 100 multi-family houses creates 122 jobs during construction and 46 jobs every year thereafter.

Conine and the NAHB also point out that the impact of building houses reached "far beyond" the construction sector into all phases of the economy. Local governments realize new revenue as not only builders expand and pay taxes but so do the various and numerous businesses which serve the growing population.

The big trade group, whose 205,000 members employee something on the order of 8 million people, figures that over a 10-year period, building 100 houses generates additional taxes and other revenues of $5.4 million. For 100 apartments, the total is $3.7 million.

And of course, local government spends what it takes in from all this activity on new schools, new parks, police and fire equipment, pay raises and the like.

Published: March 13, 2002

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.