Pickerington Area Taxpayers Alliance

Guest column
Homebuilders essential to all local economies

Thursday, June 9, 2005

James Hilz


Would you be surprised to learn that the collective residential homebuilding industry employs more central Ohio residents than does the state of Ohio?

This is equal to the combined total of the area's three largest private-sector employers -- JP Morgan/BancOne, Nationwide and Ohio Health.

You might not be surprised if you were one of the employees of the Dominion Homes lumber facility in the Linden neighborhood of Columbus. These employees are but one example of the more than 33,000 people who made their living in central Ohio's residential construction industry.

Housing is one of the leading economic engines that drive local economies. Nationally, housing accounts for about 15 percent of gross domestic product (GDP) in a typical year. During economic recoveries, housing's impact on the economy is even greater than normal, accounting for up to one-third of the change in the GDP.

Most homeowners already understand and use homeownership to their economic advantage. But what impact does homebuilding and housing development have on the community-at-large? Simply, it creates jobs, provides the single largest source of wealth accumulation through homeownership and contributes tens of millions of dollars in federal, state and local taxes.

In a recently updated study using the examples of the year 2004 in the city of Columbus, Franklin County and Delaware County, the combined economic benefits to the respective communities were tremendous.

During that year, the residential construction industry created more than 20,000 construction jobs and more than 13,000 additional jobs that rely on the building industry. That's a total of more than 33,000 new jobs during a challenging economic period.

In addition, all economic activity has both direct effects -- dollars spent in the given industry -- as well as indirect effects on related industries and through increases in personal income of employees. Put simply, when someone buys a new home, in addition to bricks and mortar, they are also spending money on lawnmowers, furniture, tools, swing sets, etc.

According to the U.S. Bureau of Economic Analysis, for each dollar spent, new residential single-family structures in Franklin County and Delaware County generate an additional 53 and 51 cents, respectively, in economic activity in other sectors of the economy throughout the county.

The total economic benefit for the city of Columbus, Franklin County and Delaware County in 2004 exceeded $3.2-billion dollars.

This is all occurring at a time when the economy still ranks as the No. 1 concern for most Ohioans.

It seems, however, that more and more, the residential construction industry is becoming a target for local governments to squeeze additional fees and surcharges in an effort to fill local government revenue shortfalls. Many also have misconceptions that the new housing has strained local governments and contributed to the creation of these issues.

James B. Hilz is the Executive Director of the Building Industry Association of Central Ohio.


THIS ARTICLE WAS PUBLISHED IN THE OTHER THIS WEEK PAPERS EXCEPT PICKERINGTON THIS PAST WEEK.



By Brenda Lee

No More Free Ride

When the BIA and its friends appeared before City Council to oppose rationing of building permits, the only real benefit to this community they were able to mention was the beer that construction workers bought at local convenience stores on their way home.

I suppose there are other benefits to this community too. But most of the businesses benefited don't belong to Pickerington residents. Due to TIFs, these businesses don't pay taxes to support our schools. And the minimum wage service jobs they bring to Pickerington are a questionable benefit.

These benefits must be balanced against the considerable social costs of uncontrolled and unplanned residential growth -- costs that builders are able, in economists' parlance, to ''externalize,'' so that they are paid, not by builders and homebuyers, but by us residents and taxpayers. Mr. Hilze conveniently ignores these, and they are considerable.

No community could build schools fast enough to keep up with an enrollment growth of 500+ students per year, even if the community could afford to build the requisite additional schools, which most can't. Keeping up would take almost one new school per year.

There is the same strain on all of our other public facilities and services -- roads, water, sewer, police, fire and so forth -- and the same problems keeping up with growth. The fact is, most communities simply can't keep up, with the result that everyone in the community suffers from continual decline in service levels. The congestion, not just on 256, but on I-70, the trailer parks surrounding our schools, and our steadily increasing property taxes are just a few of the results.

Yet the BIA continues to expect a free ride. I don't think we should continue to give them one. This is our community, not theirs, and if they want to continue to do build in this community, we should insist that they do so on our terms.