Apartment construction, operations and residents contributed $191 billion to California’s economy, supporting 4.5 million jobs in 2011, according to a report released this past week by the National Multi Housing Council (NMHC) and the National Apartment Association (NAA).
Nationally, the apartment industry and its residents contributed $1.1 trillion to the economy in 2011, or more than $3 billion daily. This combined spending supported 25.4 million jobs.
“This data confirms what we’ve known all along -- rental housing creates and sustains numerous good paying local jobs and helps drive San Diego’s economy,” said Alan Pentico, executive director of the San Diego County Apartment Association (SDCAA).
“Not only property managers and related personnel, like maintenance technicians, but also numerous suppliers including pest control, landscaping, painters, laundry, staffing companies and online marketing services, to name a few.
"This eye-opening report shows just how important rental units and residents are to the economy, and the impact is even greater when you consider the report only included buildings with more than five apartment homes.”
Within California in 2011, the apartment industry spent nearly $3 billion on new apartment construction, creating a total economic contribution of $6.7 billion and supporting 45,300 jobs.
SDCAA member and economist Alan Nevin, principal at London Group Realty Advisers in San Diego, said, “As apartment construction becomes more sophisticated, often with structured parking, the economic multiplier moves closer to that of a single-family home. Traditionally, a single-family home creates two man-years of labor while traditional two-story apartments creates a third of that. That gap is closing and apartments are now seen as a powerful economic force in the construction industry.”
California’s 6.2 million apartment residents spent $76 billion on goods and services within the state in 2011, creating a total economic impact of $159 billion and supporting 4.1 million jobs.
Based on research by economist Stephen S. Fuller, Ph.D., of George Mason University’s Center for Regional Analysis, the report covers the economic contribution of apartment construction, operations and resident spending on a national level plus all 50 states.
“Although attention is usually focused on homebuilding and the single-family sector, the annual construction and operating outlays for apartment buildings with five or more units are major sources of economic activity, jobs and personal earnings,” Fuller said. “In addition, the residents of apartment buildings constitute an important source of local, state and national economic activity as their spending for goods and services is recycled through the economy. Like the operating outlays for apartment buildings, the spending by renters recurs annually, thereby supporting local economies on an ongoing basis.”
“For the first time we’re able to quantify the tremendous economic impact of apartment residents across the country, in addition to the powerful contributions from apartment construction and operations,” said NAA Chairman of the Board Alexandra Jackiw. “It truly shows a comprehensive view of the industry’s critical role not just in housing, but to the economy.”
“Even in one of the worst economic climates we’ve ever seen, the multifamily industry and its 35 million residents contributed more than $1 trillion to the economy,” said NMHC Chairman Thomas S. Bozzuto, CEO of The Bozzuto Group. “With up to 7 million new renter households forming this decade -- almost half of all new households -- the dollars and jobs we add to the economy will only grow in magnitude.”