According to a new Hoyt Advisory Services study commissioned by the National Apartment Association and the National Multifamily Housing Council, the apartment industry and its consequent residents contribute more than $3.4 trillion to the national economy annually, or more than $9.3 billion daily.
Resident spending represents the largest portion with tenants contributing $3 trillion, while the other three sectors provide smaller contributions. Industry operations adds $175.2 billion, new construction adds $150.1 billion, and renovation and repair adds $68.8 billion.
“The multifamily industry is an economic engine powering the economy very significantly at the national, state, and local levels,” said Robert Pinnegar, NAA president, in a press release. “This clearly illustrates the tremendous positive impact our apartments have on the communities they serve.”
The report, available at WeAreApartments.org, provides details on how different aspects of the industry positively impact the national, state, and local economies. For example, tax payments associated with apartment operations, as well as tax payments by apartment residents, contributed $408.9 billion to the economy and has continued to support schools, improvements to infrastructure, and other critical services in local communities.
Additional highlights from the report include:
- After reaching a height of 346,900 completions in 2017, up from 129,900 in 2011, all four sectors continue to post very strong growth. Construction has ramped up to meet the demand for apartments this cycle.
- In order to meet current demand, previous research from Hoyt Advisory Services says that we need to build an average of 328,000 apartments per year, which could bring continued economic activity.
- A significant portion of the existing apartment stock will need to be renovated in the coming years. Hoyt research predicts this will boost spending in the renovation and repair sector.
“Construction is still moving ahead, as there’s a need for additional apartments in many states,” said Douglas M. Bibby, NMHC president, in the same release. “Due to an abundance of aging stock, there’s a growing need for renovations and improvements on existing apartment buildings. Construction and renovation/repair will provide a sizable boost in jobs—and the economy—nationwide and will continue to be a hefty contribution to the country’s economy for decades.”