Study: Rental Boom is Boon to San Francisco Area Economy,
Contributing $25.3B Locally in 2013
Fueled by Demographic Changes, Growing Millennial Population, Rediscovery of Urban Cores, People are Increasingly Drawn to Apartment Living
WASHINGTON, D.C. – 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 San Francisco metro area’s economy benefited from the rental boom. In 2013 – the latest numbers available – apartment construction, operations and resident spending contributed $25.3 billion locally and supported 209,400 jobs in the metro area.
The economic data are part of new research commissioned by the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA), which looks at dollars and jobs from apartment construction, operations and resident spending, nationally, by state and in 40 specific metro areas, including the San Francisco metro area. The data is based on research by economist Stephen S. Fuller, Ph.D., of George Mason University’s Center for Regional Analysis
Nationally, the apartment industry and its 36 million residents contributed an impressive $1.3 trillion to the U.S. economy, supporting 12.3 million jobs across the U.S. in 2013.
The study showed that in the San Francisco metro area:
· The local economic contribution from the apartment industry totaled $25.3 billion, supporting 209,400 jobs.
· The economic contribution of local apartment construction totaled $3.1 billion.
· The economic contribution of local apartment operations totaled $3.4 billion.
· Apartment construction and operations supported more than $1.9 billion in personal earnings for local workers.
· Renter spending in the San Francisco metro area contributed $18.8 billion to the local economy.
· The total economic contribution of the apartment industry and its residents in California totaled $139.1 billion and supported 1.3 million jobs.
“The Bay Area is headquarters to a number of technology powerhouses, including Google, Intel and Apple, which attract a highly educated workforce of young adults to the metro area. The diverse Bay Area economy is also driven by strong construction, finance and tourism industries that, collectively, generate a tremendous demand for area apartments. Even as construction levels stand at a 20-year high, especially in San Francisco and Oakland, the supply of apartments in the Bay Area remains insufficient,” said Jill Broadhurst, Executive Director of the East Bay Rental Housing Association. “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.”
“Here in the Bay Area, we’re feeling the positive economic impact of the booming apartment industry, which is helping our city thrive,” Broadhurst explained. “The great news about the apartment industry is that the dollars and jobs don’t end with construction. The ongoing operations and resident spending make each apartment community an economic engine, supporting local jobs and making a positive economic impact in our area – and in towns across the country.”
Some of the apartment construction projects in the East Bay area include Summerhill in Walnut Creek, Del Monte Conversion in Alameda, the Lampwork Lofts in Oakland, as well as a new project by AvalonBay in Emeryville.
“Our study showed major increases around apartment construction, with construction spending, economic contributions and personal earnings all rising substantially,” said Fuller. “The construction for multifamily apartment buildings is a significant and growing source of economic activity, jobs and personal earnings in communities nationwide.”
“According to our study findings, apartment construction has been on the rise over the past five years. In 2009, during the economic recession, there were only 97,000 construction starts, which was the lowest level since records began in 1964. In comparison, there were 294,000 construction starts in 2013 – a significant increase,” said NAA Chairman Tom Beaton, Senior Vice President, Management, The Dolben Co.
“The most visible sign of the rental resurgence – apartment construction – is on the rise, contributing $93 billion to the national economy in 2013, resulting in $30 billion going directly into the paychecks of more than 700,000 workers,” said 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.”