Extent of Underbuilding in the Single-Family Housing Market

Special Studies, November 1, 2010

By Robert Denk and Paul Emrath, Ph.D.

National Association of Home Builders

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New Home Construction Benefits California's Economy

A new study by the Center for Housing Policy titled “Building California’s Future” found that, on average, a newly built home selling for the median price in the state of California produced an estimated $375,699 in new economic activity in fiscal year 2009-2010.  This economic activity is enough to support the creation of 2.1 jobs per new home built, the study found.  The findings overall, indicated that California’s economy benefits substantially when a new home is built even with the economic downturn and declining home values. 

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Economic Benefits of Housing - 2010 Update

An updated version of The Economic Benefits of Housing report released today by the California Homebuilding Foundation (CHF) in conjunction with the Center for Strategic Economic Research (CSER), confirms that the housing industry’s economic output has fallen approximately 80 percent since 2005, representing a loss of tens of billions of dollars and hundreds of thousands of jobs to the state’s economy.

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The Housing Bottom Line

This study examines the fiscal impact of new housing on California governments. Specifically, it looked at both one-time and new ongoing revenues and expenditures at the city, county, and state levels. It estimates costs and revenues using an average, per-household-based approach in which the total costs or revenues associated with current residents were divided by the number of current households to arrive at an average per-household cost or revenue calculation. The study concludes that new housing construction has a substantial net fiscal benefit to the state and local governments in California.

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Reducing GHG through Housing Retrofits

This study funded by the California Homebuilding Foundation evaluates cost effective strategies for reducing Greenhouse Gas emissions from the housing sector.

Seventy percent of the GHG emissions related to single-family envelope energy consumption can be attributed to homes built before California had an energy code (1983). The statewide carbon impacts of retrofitting these homes with upgraded energy features were explored. Spending $10,000 retrofitting a 1960s home could save 8.5 tons of carbon, a cost of $588 to $1,176 per ton depending on tax credits and incentives. Increasing the energy efficiency of a new home 35% (from the 2005 T-24 Standards) would cost about $5,000 and would reduce emissions by 1.1 tons at a cost of $4,545 per ton. Retrofitting existing homes with energy-efficient features is four to eight times more carbon- and cost-efficient than adding further energy-efficiency requirements to new housing.

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Economic Benefits of Housing - 2009 Update

This summary updates previous reports on the Economic Benefits of Housing in California.

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Meeting the Housing Challenge in LA and Ventura - 2007

In the midst of what many consider to be a weakening housing market, Los Angeles and Ventura counties continue to face a serious housing shortage. BIA/LAV and the LAEDC conducted set out to get a more accurate picture of what is really going on in the local housing market. The resulting study – “Meeting the Housing Challenge in L.A. and Ventura” – takes an in-depth look at the nature of the region’s growing population, housing issues related to those population issues, and how infrastructure is affected. 

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Economic Benefits of Housing - 2006

Homebuilding contributes nearly $68 billion a year to the state’s economy and creates close to 487,000 jobs, according to The Economic Benefits of Housing, a study prepared by the Sacramento Regional Research Institute. The report  also found that the entire housing industry — including all goods and services purchased for existing homes as well as new homes — generates nearly $273 billion in economic activity, supports about 960,000 jobs and accounts for about 11 percent of all economic activity in California.

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