New research shows that building 100 homes in Greater Houston could support nearly 600 jobs and generate $115 million in economic activity.
Key Takeaways
- Big Economic Impact: Building 100 additional single-family homes in Greater Houston could generate $115 million in economic activity, support nearly 600 jobs and produce $48 million in labor income in the first year.
- Growth Beyond Construction: Expanding the housing supply helps businesses attract workers, supports household spending and strengthens the regional economy. Homebuilding and related economic activity contribute approximately $22.8 billion annually to Greater Houston’s GDP.
- Long-Term Financial Benefits: Building 100 additional homes annually for 30 years could generate $823 million in cumulative local tax revenue, highlighting housing’s role in sustaining Houston’s economic growth.
HOUSTON, Nov. 9 – Building more homes in Greater Houston could do more than address the region’s housing needs. It could also create hundreds of jobs and deliver a significant boost to the local economy, according to a new University of Houston study.
The report, “The Local Economic Impact of Additional Housing Production in Greater Houston,” prepared by researchers at UH’s C. T. Bauer College of Business, found that constructing 100 additional single-family homes could support nearly 600 jobs, generate $115 million in economic output and produce nearly $48 million in labor income in the first year.
But the economic benefits extend far beyond construction.
“Housing is a core component of having a thriving, growing economy,” said Keith Richards, who authored the report. “You really have to have those homes to grow the economy.”
Prepared for the Greater Houston Builders Association, the study examines how residential development influences economic activity across 13 counties, including Harris, Fort Bend, Montgomery and Galveston.
Researchers estimate that homebuilding and the economic activity it supports contribute approximately $22.8 billion annually to Greater Houston’s gross domestic product, representing 2.8% of the regional economy.
The Economic Ripple Effect of Homebuilding
While construction creates immediate demand for workers, building materials and professional services, the study found that new homes also support economic growth by attracting workers and consumers.
“When you have that housing unit, you have an employee that might be able to move there to be a part of a company in that market,” Richards said.
That employee might also arrive with a spouse who joins the local workforce, he said, creating additional opportunities for economic growth.
Beyond supporting hundreds of jobs, the study estimates that every 100 additional homes could generate approximately $68.3 million in added economic value during the first year.
The study used economic modeling software to measure the direct effects of construction, spending throughout the supply chain and the additional economic activity supported by new households.
Unlike traditional economic impact studies, the analysis also considers how housing availability enables businesses to attract employees and expand.
“You can’t have employees without housing,” Richards said. “In many ways, having a housing shortage hampers the economic development of an area.”
A Long-Term Investment in Houston’s Future
The economic benefits of additional housing could continue accumulating for decades.
According to the study, building 100 additional homes annually for 30 years could generate approximately $823 million in cumulative local tax revenue. Adjusted to today’s dollars using a 4% discount rate, that amounts to approximately $405 million.
Approximately 95% of that long-term revenue would come from households and the economic activity they support.
“Having enough availability of homes being delivered allows for those employees to come in and find something they can afford,” Richards said.
However, researchers warn that rising development costs, regulatory requirements, infrastructure challenges and other barriers could threaten the region’s ability to meet housing demand.
Richards said maintaining an adequate housing supply is particularly important for Houston, which has historically benefited from its relative affordability compared with other major metropolitan areas.
“There’s no doubt that Houston will continue to be an economic engine, but that engine has to have the people to feed it,” Richards said. “Having that housing and continuing to grow the housing supply is critical to that.”
