Despite the worst economy in a generation, apartments and their residents contributed $1.1 trillion to the national economy in 2011, supporting 25.4 million jobs, according to a new report released by the National Multi Housing Council (NMHC) and the National Apartment Association (NAA).
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. In addition, construction and operations data is available for 12 metro areas: Atlanta; Boston; Chicago; Dallas; Denver; Houston; Los Angeles; Miami; New York City; Philadelphia; Seattle; and Washington, D.C.
Highlights from the report include:
- The apartment industry spent $14.8 billion on construction in 2011, and this was a year with one of the lowest multifamily completions on record, just 130,000 new units. The average pre-recession was around 270,000 completions.
- The industry spent $67.9 billion in 2011 to operate and improve the country’s 19.3 million apartments—more than four times the amount spent on construction—creating a $182.6 billion economic contribution supporting 2.3 million total jobs.
- The country’s 35 million apartment residents spent $421.5 billion on goods and services in 2011—70 percent of which stayed within the local economy. The spending created a total economic impact of $885.2 billion supporting 22.8 million jobs nationwide.
- The combined contribution of apartment construction, operations and resident spending equals $1.1 trillion, or more than $3 billion every day.
“Although attention is usually focused on home building 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 says. “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.”
In conjunction with the study’s release, a new website breaks down the data by each state and the 12 metro areas through an interactive map. Visitors can also use ACE, the Apartment Community Estimator, a new tool that allows users to enter the number of apartment homes of an existing or proposed community to determine the potential economic impact within a particular state.
“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,” says NAA Chairman of the Board Alexandra Jackiw, CPM, CAPS. “It truly shows a comprehensive view of the industry’s critical role not just in housing, but to the economy at large.”
“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,” says NMHC Chairman Thomas S. Bozzuto, CEO, The Bozzuto Group. “With up to seven 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.”