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The mission of the Home Builders Association of Fargo-Moorhead is to provide quality services, benefits and education to our members and the community. Striving to be a visible and proactive influence, the association represents the collective interests of the home building industry.

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New housing impact study reiterates need to secure growth, decide on permanent flood protection to ease concerns

The HBA of F-M released a housing impact study for the Fargo-Moorhead metro area during a press conference Oct. 11. National Association of Home Builders Senior Economist Elliot Eisenberg presented the findings that show financial benefits of growth to the metro area and surrounding community. Click here to view the slides from his presentation. A full version of the study's two parts, "Income, Jobs and Taxes Generated" and "Comparing Costs to Revenue for Local Governments" is also available.

“The study shows that construction of a new home pays for itself, plus the infrastructure it needs after only one year,” says Eisenberg. “The amount of economic activity following the construction of a home is tremendous. From the fees paid to the city, to the workforce it employs, and ultimately to the new homeowners, it all creates an economic ripple effect across the community that local jurisdictions benefit from.”
 
Eisenberg's study results showed the following:
  • In the first year, construction of 100 single-family homes generates nearly $9.5 million in local income, over $1 million in local taxes and creates 154 local jobs.
  • The ripple effect from the construction phase creates $4.6 million in local income, $485,000 in local taxes and 82 local jobs.
  • New residential construction generates approximately 890 full-time jobs which is comparable to employers like Microsoft and US Bank, and makes it the sixth largest private employer in the F-M area.
  • Housing pays for itself: By the end of the first year, debt for services like fire and police protection, garbage collection, roads and schools is fully paid off. For every 100 single-family and 75 multi-family units, net income after just one year is nearly $46,000 and eventually grows to as much as $379,900 thereafter.

Building Permits
The HBA of F-M also released a 2011 third quarter permit report showing construction activity within the four cities of Dilworth, Moorhead, Fargo and West Fargo. Due to flooding worries and flood-affected regulations, permits continue to reflect challenges the building industry faces. Total housing starts were down over 20 percent at 447; last year at this time, there were 569 housing starts. This year’s production is the second-lowest in the last 20 years; 1997 (another major flood year) was the lowest.
 
HBA President Tyrone Leslie, Heritage Homes, says, “The last three years, our region has shown incredible perseverance and sense of community, but all of that success has come at a cost. Safety concerns, undecided regulations, increased development costs, and financial uncertainties of buying a home or locating a business are just a few of the results that have followed years of flooding.”
 
Leslie spoke about the great efforts that have already been made across the communities to protect from flooding, but the work isn’t done yet. He covered three main points currently impacting growth:
  • The need for permanent flood protection for new and existing homes;
  • Unknown regulations being developed both locally and federally that create an unstable business environment;
  • A changing perception the region faces from a community of growth and prosperity to a community continually battling potential flood disasters.
“Jobs will be lost if permanent flood protection isn’t decided soon,” Leslie says. “These aren’t just policy discussions; we’re talking about real people with families and lives.”
 
Eisenberg says, “In our current economic situation, the buzz word of the day is jobs and there are not too many industries that have the job-creating power of the housing industry. The construction of a new home takes an entire team across a wide breadth of the workforce. From plumbers, to electricians, to carpenters, to the cleaning crew, the local job-creating benefits from building a new home are incredible.” 
 
More on the housing study:
NAHB previously performed the study for the F-M area in 1997 and 2005. Since the NAHB model was initially developed in 1996, it has been successfully applied to over 340 metropolitan areas, non-metropolitan counties, and states across the country.
 
Eisenberg holds a bachelor’s degree in economics from McGill University, and a master’s degree and doctorate in public administration from Syracuse University. He is frequently seen on television and heard on radio and his research and opinions have been featured in Business Week, Fortune, many national and local newspapers and in numerous other publications.

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If you were on official extended duty outside of the United States for at least 90 days between Jan. 1, 2009 and May 1, 2010, you may qualify for the federal housing tax credit that expired April 30, 2010. Visit www.federalhousingtaxcredit.com for more details.

  

 

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