Can housing construction lead the economy out of recession?

by Candyd Mendoza06 Apr 2020

Aside from replenishing the national inventory, building new homes might also play a vital role in bringing the US economy back to health once the COVID-19 outbreak is contained.

The National Association of Home Builders reported that building 1,000 average single-family homes creates 2,900 full-time jobs and generates approximately $110 million in taxes and fees, which the government can use to support police, firefighters, and schools.

Similarly, building a thousand rental apartments results in 1,250 jobs and $55.91 million in taxes and revenue for local, state, and federal government, while $10 million in remodeling expenditures generates 75 jobs and roughly $3 million in taxes.

“Before the coronavirus pummeled the US economy, housing was on the rise with January and February new-home sales numbers posting their highest reading since the Great Recession,” said NAHB Chairman Dean Mon. “The demand is clearly there, and as this study shows, we expect that housing will play its traditional role of helping to lead the economy out of recession later in 2020 when the pandemic subsides.”

However, building new homes and apartments is more likely to create jobs in industries that produce lumber, concrete, lighting fixtures, heating equipment, and other home remodeling-related products. Other jobs are generated in the process of transporting, storing, and selling these products, according to NAHB.

Last week, the Department of Homeland Security designated the construction of single-family and multifamily housing as an "essential infrastructure business," which means that construction could continue in places under stay-at-home orders.

Mon said that NAHB has already come up with a plan to protect workers from coronavirus.

“Ensuring the health and safety of home builders and contractors is our top priority,” Mon said. “This is why NAHB and construction industry partners have developed a coronavirus preparedness and response plan specifically tailored to construction job sites. The plan is customizable and covers areas that include manager and worker responsibilities, job site protective measures, cleaning and disinfecting, responding to exposure incidents, and OSHA record-keeping requirements.”