Washington- 10 March 2015- A new research, commissioned and conducted by the National Apartment Association (NAA) and the National Multifamily Housing Council (NMHC), has brought to light the impressive $1.3 trillion contribution by the multifamily apartments and housing rental or construction sector to the country’s economy.
The research was headed by a Ph.D. economist from George Mason University’s Center for Regional Analysis named Stephen S. Fuller. According to his results the sectors investing in the construction of multifamily apartments are becoming a major source of economic growth besides creating job opportunities for people across the country. Records show that construction sectors of multifamily buildings have contributed a sum worth $1.3 trillion to the economy in 2013 wherein $93 billion formed directly part of the national economy whereas $30 billion took the indirect via the books of Salary and Wages for more than 700,000 workers. In fact, $5 billion came from Los Angeles while Chicago, New York Washington D.C. and Atlanta each contributed $1 billion.
The scope of the research took into accounts various aspects of functionality of the housing sector through construction, repair maintenance, and operational expenses of the entire region, namely the fifty states, coming under the District of Columbia. According to Mr. Stephen S. Fuller, apartment construction is on the up-hill journey “with spending, economic contributions and personal earnings from construction all rising substantially”. It has taken them five years of slow progressive rise in order to arrive at the present state of bursting growth and success. Record has it that 2009, a period of “economic recession”, documented “only 97,000 construction starts”, the bottom most figure since 1964. From the bottom pit, construction industry has climbed with steady steps; as a result 2013 has recorded almost $30 billion of construction expenditure through “294,000 construction starts”, which have set a new margin in the books of record.
In order to meet the “resident demand” there should be “300,000 to 400,000 new apartments each year”; but since the time of “the Great Recession” till the year of 2013 only half of the required demand quantity has been achieved with the completion of “186,000 units”, remarked CEO of Avanath Capital Management, Daryl Carter, who is also a chairman of NMHC. In his words- "After bottoming out in 2009, apartment starts have increased nationally almost to the point of meeting annual demand, but the lengthy development process and years of backlog mean that completions aren’t likely to hit the necessary level for a couple of years. This increase of available apartments will also help address affordability challenges that we see in many markets across the U.S.”
The apartment community is a source of continual income generating unit as the economic side of its story doesn’t end with the construction bit instead it extends further with its repair and maintenance and other operational costs including creating local job opportunities and contributing to a positive economic growth.
According to Business Wire the highlights of NAA and NMHC research are:
The multifamily apartment construction sector carries on the double flow of spending and earning influencing the economic growth In 2013 it provided 702,000 jobs and put in $92.6 billion to the country’s economy. 19.5 million Apartments’ operational expenses across the country offered 1.5 million employment opportunities while generating $190.7 billion which added to the economic growth. In the year of 2013, $1 trillion were contributed to the national economy by 36 million residents living in apartments across the country; in addition to that they also employed 10.1 people. “Economic engine” consisting of various apartment related monetary transactions, namely “construction, operations and resident spending” amounts $1.3 trillion annually and almost $3.5 billion on a daily basis. The research was headed by a Ph.D. economist from George Mason University’s Center for Regional Analysis named Stephen S. Fuller. According to his results the sectors investing in the construction of multifamily apartments are becoming a major source of economic growth besides creating job opportunities for people across the country. Records show that construction sectors of multifamily buildings have contributed a sum worth $1.3 trillion to the economy in 2013 wherein $93 billion formed directly part of the national economy whereas $30 billion took the indirect via the books of Salary and Wages for more than 700,000 workers. In fact, $5 billion came from Los Angeles while Chicago, New York Washington D.C. and Atlanta each contributed $1 billion.
The scope of the research took into accounts various aspects of functionality of the housing sector through construction, repair maintenance, and operational expenses of the entire region, namely the fifty states, coming under the District of Columbia. According to Mr. Stephen S. Fuller, apartment construction is on the up-hill journey “with spending, economic contributions and personal earnings from construction all rising substantially”. It has taken them five years of slow progressive rise in order to arrive at the present state of bursting growth and success. Record has it that 2009, a period of “economic recession”, documented “only 97,000 construction starts”, the bottom most figure since 1964. From the bottom pit, construction industry has climbed with steady steps; as a result 2013 has recorded almost $30 billion of construction expenditure through “294,000 construction starts”, which have set a new margin in the books of record.
In order to meet the “resident demand” there should be “300,000 to 400,000 new apartments each year”; but since the time of “the Great Recession” till the year of 2013 only half of the required demand quantity has been achieved with the completion of “186,000 units”, remarked CEO of Avanath Capital Management, Daryl Carter, who is also a chairman of NMHC. In his words- "After bottoming out in 2009, apartment starts have increased nationally almost to the point of meeting annual demand, but the lengthy development process and years of backlog mean that completions aren’t likely to hit the necessary level for a couple of years. This increase of available apartments will also help address affordability challenges that we see in many markets across the U.S.”
The apartment community is a source of continual income generating unit as the economic side of its story doesn’t end with the construction bit instead it extends further with its repair and maintenance and other operational costs including creating local job opportunities and contributing to a positive economic growth.
According to Business Wire the highlights of NAA and NMHC research are: