The numbers are dizzying: The local apartment industry contributed nearly $12 billion to the San Diego regional economy while supporting more than 111,000 jobs in 2013, according to a new study.
The National Multifamily Housing Council and National Apartment Association created a snapshot of the economic impact of apartments nationally, by state and in 40 metro areas, including San Diego. Using data from 2013, the latest available, the study analyzed money and jobs from apartment construction, operations and residents’ spending.
The total economic impact of the industry in San Diego is impressive — $11.9 billion. Interestingly, the second-biggest impact came from the renters themselves, whose spending contributed $8.6 billion to the local economy. The contribution from construction totaled $1.4 billion.
This makes for a very sustainable trend when the dollars don’t go away after construction. In fact, each apartment community can be seen as its own economic engine, pumping dollars into the economy and supporting jobs growth for years after the buildings are built.
Clearly, the apartment industry emerged as one of the strongest economic sectors coming out of the recession. This should not be surprising, given that San Diego has seen significant growth in the 20-to-34-year-old demographic, an age group that tends to favor renting apartments. That population trend, coupled with strong job growth, has led to historically high demand for apartments in San Diego.
The study also found that, on a national level, apartment construction has been on the rise over the past half-decade. While only 97,000 construction starts were reported in 2009, that number had risen to 294,000 by 2013.
Not only was the improving economy a factor in that meteoric rise, but also the growing flight of millennials from suburban to urban settings. A favorable byproduct of the construction boom is likely to be an increase in the affordability index of housing overall.
Other key findings from the study are:
• The economic contribution of apartment operations in San Diego totaled $1.9 million.
• Apartment construction and operations supported more than $1.1 billion in personal earnings for local workers.
• The total economic contribution of the apartment industry and its residents in California totaled $139.1 billion and supported 1.3 million jobs.
• Nationally, the apartment industry and its 36 million residents contributed an impressive $1.3 trillion to the U.S. economy, supporting 12.3 million jobs across the U.S. in 2013.
As a nonprofit organization that has served the rental housing industry since 1919, the San Diego County Apartment Association finds the results of this study extremely promising for the future.
The strong numbers cut across many sectors, creating broad benefits for all of SDCAA’s 2,500 members, including rental property owners, rental property managers and suppliers of goods and services to the rental housing industry.
This study was based on research by economist Stephen S. Fuller, Ph.D., of George Mason University’s Center for Regional Analysis. The full nationwide study is available on the website www.WeAreApartments.org. More information on the economic impact for San Diego can be found at www.WeAreApartments.org/metro/san-diego.