Housing Industry in California Fundamental to Economic Recovery

New housing sector down 221,000 jobs and $28 billion in economic benefit which impacts working Californians and government budgets

 

For Immediate Release

Monday, October 20, 2008

 

Contact:           

John Frith

(916) 443-7933 ext. 332

(916) 803-3005 (cell)

jfrith@cbia.org

 

Andrew Kiefer

(916) 448-5802

(714) 580-9477 (cell)

 

SACRAMENTO – Today, the California Homebuilding Foundation (CHF), in conjunction with the Sacramento Regional Research Institute (SRRI) released the “The Economic Benefits of Housing” report which details the role new housing and the housing industry plays in the economic health of California. The study was conducted as a third update to a report first commissioned in 2003. SRRI analyzed data from all of the state’s 58 counties individually, quantifying the impact of California’s construction sector to the state’s overall economic and municipal health.

 

“The importance of reviving the housing industry in California has never been more evident than it is today,” said Horace Hogan, Acting Chairman of the California Building Industry Association. “In just two years, from 2005 to 2007, the industry was down more than 221,000 jobs and $28 billion in economic benefit, impacting working Californians and government budgets.  And unfortunately, 2008 promises to be even worse.”

 

The report found that new housing construction in California contributed nearly $40 billion dollars  to the California economy in 2007, totaled more than 1 percent of the state’s output and supported over 266, 000 jobs.  While those numbers are still significant, they only represent a fraction of what the industry had contributed in previous years.

 

“The declines are staggering,” said Ryan Sharp, Director of the Sacramento Regional Research Institute.  “The homebuilding industry has been an engine for the California economy for years, but the year over year declines in job losses and decreases in economic output illustrate the far reaching effects of the current housing market crisis. Some of the hardest hit areas include Southern California’s Inland Empire where the output totals and employment impacts fell nearly 50 percent from 2006 to 2007.”

 

The report also notes that if you take into account all related activities that complement new-home construction, the industry, even during tough economic times, generated nearly $354 billion in economic output, supported approximately 1.2 million jobs and comprised the single largest industry in California, accounting for 11 percent of all economic activity in the state.  The study also quantified the losses of what is being characterized by many as the largest industry collapse in history and identified the segments of the population most affected by these losses. According to the Associated Press, working families have suffered most from the loss of over 79,200 jobs since August of 2007, with one out of every 10 workers being laid off in the construction industry. State and local governments also suffer from the diminished number of permits pulled in 2007; resulting in significant decreases in property taxes, sales tax revenue and impact fee revenues.

 

“Now more than ever, local, state and federal policy makers should be working to enact policies that will help the industry recover, such as reducing fees and expediting our builders’ efforts to increase density, reduce housing sizes, and also provide incentives to buyers,” Hogan said.  “Only when new construction recovers, will we get the economy back on track.”  

 

The full report can be found on the California Homebuilding Foundation website at   www.mychf.org/tasks/sites/chf/assets/File/Economic_Housing_study_08(1).pdf.

 

 

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