ECONOMIC IMPACT STUDY SHOWS
HOME BUILDING PAYS ITS WAY IN KLAMATH COUNTY, OR

An economic impact study conducted by the National Association of Home Builders (NAHB) Housing Policy Department shows that the home building industry in Klamath County, OR not only pays for itself, its economic impact results in new income and jobs for Oregonians and additional revenue for local governments.

Every 100 single-family homes built in Klamath County in 2008 will generate a cumulative $14.6 million in revenue, compared to only $10.6 million in costs over the next 15 years. By the end of the first year the housing industry's economic impacts more than offset the fiscal costs resulting in a fiscal surplus to local governments.  Moreover, by the end of the fourth year the fiscal surpluses are more than enough to pay off all debt and result in a surplus available to pay for additional government services. Collectively new single-family housing produces a net income to local governments of $347,100 in the first year, and $357,800 each and every year thereafter.

"These results show that home building is more than paying its own way and should put to rest the notion that existing home owners are subsidizing new home construction here in the Klamath Falls area," said Dr. Elliot Eisenberg, the Senior Economist who conducted the analysis of the impact of home building here in Klamath County.  "This is an excellent result and tells me that local residents should be thanking the building industry for footing the bill for a lot of city services."

The economic impact study looks at the impact of the construction industry in three phases: the construction phase; the ripple effect; and, the occupancy phase. The impact of the three phases are added up, and then compared to the cost of services such as education, fire, police, utilities, parks and recreation and roads that are required to support the new housing units.

During the construction phase, the building of every 100 single-family homes creates 214 jobs (148 jobs in construction alone), generates $1.3 million in local taxes and $11.1 million of local income in the first year. The ripple effect of those homes, which includes the wages and profits local area residents earn during the construction period that are spent on other local goods and services, results in another 108 jobs, $683,400 in local taxes and $5.1 million in local income, also in the first year.  The ongoing annual effect of those homes, which includes local jobs, income and taxes generated as a result of the home being occupied, is 54 jobs, $873,100 in local taxes and $2.4 million in local income per year.

"It is important for us to look closely at these numbers," said KBHBA President Amanda Blodgett. "We've been saying for a long time that local home builders are doing their part to build community, and these numbers show that we are a very important player in the overall economic health of our economy."

The NAHB model used to determine the economic impact of the housing industry was first developed by NAHB in 1997 and has been applied to construction in more than 525 areas of the country. This study looks at economic impact of building 100 representative average priced single family homes across all of Klamath County, OR.

Klamath County ReportKlamath County Cost Report