Recovery Act Investment Spurs Economic Activity

 

Recovery Act Investment in Public Housing Creates Jobs, Affordable Housing

 

Will Also Result in Significant Energy, Operating Cost Savings

 

Washington, D.C. -- March 17, 2011 -- Thousands of jobs and billions in new economic activity have been created by Recovery Act funds that were invested in public housing capital projects.  A report that will be released on Thursday, March 17 shows these investments created jobs and strengthened the nation’s infrastructure while improving thousands of new affordable housing units – meeting key goals of the Recovery Act.

These are some of the key findings from a new report by the Econsult Corporation, “Public Housing Stimulus Funding: A Report on the Economic Impact of Recovery Act Capital Improvements.”   Econsult estimated the national, state, and local economic impact of the capital spending by 20 sampled agencies. The sampled agencies received a total of $700 million in Recovery Act funds.

“These funds accomplished exactly what they were intended to do, creating thousands of jobs and strengthening our infrastructure,” said HUD Secretary Shaun Donovan. “Most importantly they leveraged additional jobs and economic benefits for the neighboring communities. And they were spent tackling some of our toughest issues, particularly how to provide housing for seniors and people with disabilities, and rein in soaring energy costs.”

More than 3,100 public housing agencies received $4 billion in stimulus funds in the 2009 American Recovery and Reinvestment Act of 2009, $3 billion through the regular capital fund formula and $1 billion in competitive grants.

 “This is an excellent example of how a targeted government initiative can make a very real difference in the economy, in communities and in peoples’ lives,” said Sunia Zaterman, Executive Director, Council of Large Public Housing Authorities (CLPHA).  “With the demand for jobs and affordable housing at an all-time high, this report shows that housing authorities can have a big impact in their communities.”

Highlights from the report:

Ø      The economic impact of each $1.00 in direct PHA stimulus spending results in an additional $2.12 of national indirect and induced economic activity for a total economic impact of $3.12.

Ø      The $4 billion would generate nearly $12.5 billion in national economic activity if these findings are representative of the work completed by all 3,100 agencies.

Ø      On average, every $1 million spent on Recovery Act capital projects created 26 jobs nationally, surpassing almost every other sector of the economy.

Ø      The $4 billion would create around 104,000 jobs if the work being performed by these PHAs is representative of all 3,100 PHAs.

“As this report demonstrates, housing authorities are driving economic recoveries in their local communities, transforming federal dollars into good jobs and enduring infrastructure,” said Saul Ramirez, Executive Director, National Association of Housing and Redevelopment Officials (NAHRO).  “By investing in public housing, we ensure that safe, decent, and affordable housing will continue to exist for America’s most vulnerable families.”

The PHAs in the study completed work on more than 54,000 units at nearly 300 properties, reinforcing HUD’s report that 245,000 units have been renovated to date.

 “I recently toured some of the work at the Cambridge HA and saw firsthand how ARRA funds are putting people to work and improving the quality of life for residents,” said Tim Kaiser, Executive Director, Public Housing Authorities Directors Association (PHADA).  Noting similar ongoing initiatives in many of the country’s public housing properties, he added “the new report confirms the economic and social  benefits of ARRA. These funds have created jobs and will save energy, enhance security, and improve living conditions for residents all over the U.S.”

The capital improvements will also have a significant impact on the agencies’ energy costs. PHAs spend about $2 billion on utilities each year. Since much of the housing stock is older – and since the industry as a whole is facing a $30 billion capital backlog – much of it is less energy efficient than other housing. The Recovery Act provided more than $600 million in competitive grants for greening activities; many PHAs also used formula funds to address utilities consumption. The study highlights the greening activities of two agencies – Cambridge, MA and Portland, OR – and demonstrates the impact investments like these can have: immediately lowering operating costs and extending the life of the property.

The study is a follow up to an Econsult report completed in 2007, which found that on average, every dollar spent by PHAs on capital repairs and maintenance generated $2.12 local economic activity. The Housing Authority Insurance (HAI) Group funded this latest research, which was commissioned by CLPHA, NAHRO, and PHADA.

“The HAI Group was pleased to support this research, in part because we believe it would demonstrate that the ARRA funds would be well-invested and there would be a return for people providing the funds to see,” said Dan Labrie, CEO & President, HAI Group. “With federal funds as tight as they are, it is important that we spend that money where it can have a real impact.”

 Full report

 

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