Creighton Cox, executive officer for the Home Builders Association of Greater Des Moines, took exception to a short news item in the Business Record Thursday afternoon daily e-newsletter.
The item summarized a CNN Money report on an international study done by Dartmouth University and a British university that links higher rates of homeownership with higher unemployment rates. The researchers argue that homeownership was causative of higher unemployment a few years later.
Cox responded to us:
The article ... referring to the study that purports homeownership stifles job creation sounds ludicrous because it is ludicrous.
Homeownership remains a gateway to the middle class and numerous polls show that it is an aspirational goal for most renters. Homeownership promotes social stability and is critical in creating wealth and providing upward mobility and financial security for individual households.
Moreover, the positive direct impact of residential construction on the U.S. economy is enormous. In normal times, housing accounts for up to 17 percent of gross domestic product. Constructing 100 new homes creates more than 300 jobs and generates $8.9 million federal, state and local tax revenues.
In the Des Moines metro, this year alone, 2,410 new single-family homes and townhouses have been permitted, creating over 7,200 new jobs in the community and, at an estimated average of $200,000 valuation per home, an increased taxable valuation of $482 million for the local economy.
A strong housing industry not only means more jobs, but more money in our communities. Home building increases the property tax base which generates revenue that supports local schools and neighborhoods.
To bolster household wealth, create jobs, and encourage homeownership, policymakers should continue protecting long-standing housing policies, like the mortgage interest deduction. Homeownership is, and should always be, a part of the American dream!