Study finds apartment boom is boosting local and state economies.
The apartment industry emerged as one of the strongest sectors coming out of the Great Recession, and a new study shows just how much the Richmond metro area economy benefited from the rental boom.
In 2013 – the year for the most recent data — apartment construction, operations and resident spending contributed $2.6 billion in the Richmond region and supported 27,000 jobs, according to economic data commissioned by the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA).
The data is based on research by economist Stephen S. Fuller of George Mason University’s Center for Regional Analysis.
Nationally, the apartment industry and its 36 million residents contributed $1.3 trillion to the U.S. economy, supporting 12.3 million jobs across the country in 2013.
In Virginia that figure was $22.4 billion, supporting 223,100 jobs.
In the Richmond metro area:
· The contribution of local apartment construction totaled $142.1 million.
· The contribution of local apartment operations totaled $490.2 million.
· Apartment construction and operations supported $216.8 million in personal earnings for local workers.
· Renter spending in the Richmond metro contributed $1.9 billion to the local economy.
“Richmond is home to the Virginia state government, several institutions of higher learning and the regional branch of the Federal Reserve Bank, so our area benefits from the presence of many stable economic drivers. As a result, employment and student growth in the area is strong, increasing demand for apartments here and especially in the downtown market where Virginia Commonwealth University's growth has fueled the redevelopment of downtown Richmond,” Patrick McCloud, CEO of the Central Virginia Apartment Association, said in a statement.
“The rental boon – both locally and nationally – has been fueled by demographic changes like the growing millennial population and a rediscovery of metropolitan urban cores,” he added.
Fuller said, “The construction for multifamily apartment buildings is a significant and growing source of economic activity, jobs and personal earnings in communities nationwide.”
According to the study, apartment construction has been on the rise over the past five years. In 2009, during the economic recession, there were 97,000 construction starts — the lowest level since records began in 1964. “In comparison, there were 294,000 construction starts in 2013 – a significant increase,” NAA Chairman Tom Beaton said in a statement.
Those starts contributed $93 billion to the national economy, $30 billion going directly into the paychecks of more than 700,000 workers,” according to NMHC Chairman Daryl Carter, CEO of Avanath Capital Management. “Besides all the dollars and jobs, the increase of available apartments will also help address affordability challenges that we see in many markets across the U.S.”
In conjunction with the study’s release on Wednesday, the website www.WeAreApartments.org breaks down the data by each state and 40 key metro areas.