Looking For Big-Time Social Impact? Look At This Year’s Builder 100
Why does this matter, particularly as economists increasingly attest to greater uncertainty and more intense volatility as “new normals” of forward-looking observation?
If construction were all that home builders do for a living, there might be some validity to claims that they refuse to budge from the pre-evolved Dark Ages of producing houses.
Look at this list of business sectors and areas of subject-matter-expertise below. Now, tell me which of them doesn’t belong among the portfolio of skills “builders” need to have to thrive as companies that work to put people in new homes and communities.
- Real Estate
- Design and Architecture
- Materials Science
- Environmental Protection
- Privacy & Security
- Data Management
- Customer Service
- Community programming
- Health and safety
You can probably name a few more.
Tell me, that at some level, one or more of these proficiencies and disciplines are not core to the value chain builders create connecting people with their homes and neighborhoods.
Meanwhile, the economic and societal multiplier effect of home builders–especially the higher volume ones–is difficult to overstate when it comes to Main Street livelihoods and local wherewithal.
The National Association of Home Builders calculates that, for every 100 new homes built in a local area in a 12 month period, it’s like an adrenaline shot of economic accelerant. The one-year impact of completing 100 new residences would be upwards of $30 million in local income, $9 million in local business income, $20 million in local wages and salaries, $4 million in taxes and revenues, and just under 400 jobs. On a recurring annual basis, that carry-on impact of the same 100 single-family new homes homes equals $4.1 million local income, $3.2 million in local wages and salaries, $1 million taxes and other revenue, and 70 local jobs.
That’s a lot of spending power, both for consumers earning the money locally, and for towns and cities collecting the tax, permit, and fee revenues for their coffers.
Now, hit the Builder 100 button and play the figures, and you’ll see the numbers quickly start to boggle the mind when it comes to societal and economic impact.
Taking the 12-month period of 2018 alone, our Builder 100 and Next 100 firms settled on a total of 355,000 homes, for total revenues of $140 billion in the calendar frame. Applying the local economic impact formulas developed by the NAHB to these totals reveals the astonishing–and unappreciated, mind you–impact the leading builders have on communities, municipalities, and regions nationwide. Plug in the per-100 new home factors, and this year’s crop of Builder 100 and Next 100 deliveries correlate with $106.5 billion in local income generated, $35 billion in revenues for local businesses, $710 billion in local wages and salaries, $12.4 billion paid in local taxes, and 142,000 jobs supported during the 12-month time period we counted.
Now, the economic impact of new home development, investment, and construction is immediate and material, but that’s not the end of it. It’s also sustaining. Take, for instance, the last five year totals of the Builder 100 crop of builders, in unit volume and revenue, and apply the annual impact formulas the NAHB has researched.
Well, Builder 100 companies delivered 1.4 million new homes in the years 2014 through 2018, with total revenues of more than half a trillion dollars. What that means in local economic and societal impact is this: Builder 100 organizations generated $56 billion during that time period in annual local income, with $12.6 billion going in annual income to local business owners, $43.1 billion getting paid yearly in local wages and salaries, $14 billion in local taxes per year, and just under 1 million sustainable jobs in local economies.
This is how that looks!
Now, about those claims that home builders in the USA have their heads in the sand when it comes to running companies that can and do contribute mightily and dynamically to local, county, regional, and national economic well-being? For a business community that’s often unfairly characterized as an industry group hopelessly stuck in a bygone century, the numbers tell another story.