Economist Touts Housing Market
Building a healthy housing market is complicated, and financing can be tough, but the economic benefit is huge, a national economist said Tuesday.
Building permits in Sioux Falls for single-family homes, townhomes and multifamily units all are up through August. Elliot Eisenberg, senior economist with the National Association of Homebuilders, said building 100 new homes generates $50 million over 10 years between local income and local taxes.
“This money gets injected right away into the economy,” Eisenberg said during the Sioux Empire Housing Partnership’s annual breakfast meeting at the Holiday Inn City Centre. “Right now, this is direct ... there’s no reason why it has to stop.”
Home building of all types brings a lot of benefits and doesn’t impose a lot of costs, Eisenberg said. That’s true for median-priced single-family homes, high-priced homes, low-income and other affordable housing projects.
“When construction goes into hiatus, we don’t think quite so much about it, don’t realize it’s quite a large sector of our economy and a relatively large employer,” he said. “It’s big, but it doesn’t get appreciation. There isn’t one place where it happens, it happens all over the city.”
It’s also crucial for a city’s growth, because if housing isn’t available for new workers here, they’ll travel to another nearby city or state where it’s plentiful and spend their money there.
For every house built, 2.7 jobs are created, and 1.2 of those jobs are in construction, Eisenberg said. The rest are created through what’s called a ripple effect, when the money is spent elsewhere in the local economy, such as for carpet or at restaurants.
Through August, Sioux Falls has issued 406 permits for single-family homes, up from 226 at the same time last year. Townhome permits total 144, up from 123 last year. Multiple-family permits total 296, up from 244.
“You’re a healthy city, with a well-diversified economy, you’re a good story,” he said. “It’s a good place.”
Jim Schmidt, executive director of the Sioux Empire Housing Partnership, said the effect of affordable housing can be overlooked, but Sioux Falls continually tries to ensure it’s never neglected.
“We spend our time being advocates for affordable housing,” he said. “I would say Sioux Falls does a pretty adequate job.”
New bank regulations have made it more difficultto borrow money to put up spec homes, making business difficult for some builders and nonprofit organizations, Schmidt said. Another challenge Sioux Falls faces is building enough places for workers to live as Sioux Falls grows.
“It’s a challenge, but it’s a good one to have,” he said.
Mark Lauseng, executive director of the South Dakota Housing Development Authority, said although it’s still hard to get financing, things are easing up, and he hopes banks can find a middle ground.
His organization is limited in how much money it can provide but does a lot of work with developers in Sioux Falls to build affordable housing.
“It’s starting to pick up, things are improving, people are more optimistic,” he said of the housing market, adding that people in other states and cities are envious of Sioux Falls and South Dakota and its low delinquency rates, low foreclosures and balanced state budget.
Article by: Sarah Reinecke (Argus Leader)
Home Ideas Magazine
Discover the hottest trends, tour exquisite living spaces, and imagine the possibilities hidden within the walls of your home on the pages of the Sioux Empire's premier publication.Learn More
The Home Builders Association is celebrating 20 years of the Repair Affair Day on June 11.Read More
The two Feature Homes on the 2013 Spring Parade of Homes raised over $15,000 to benefit the Sioux Empire Home Builders Care Foundation.Read More