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Economist: Build more houses in Walworth County

ELKHORN — It seems illogical—boosting the Walworth County economy by building more houses even while foreclosures are forcing near-record numbers of people from their homes.

But that's the medicine economist Elliot Eisenberg would prescribe.

"Walworth County officials should be aware of what housing brings to the table," Eisenberg said. "It is hard to create jobs without houses."

County Administrator Dave Bretl agreed that housing might be part of the solution, but cautioned that Eisenberg works for a homebuilder and was contracted to develop the study for another homebuilder.

Even so, Bretl said, the economist raises an important point that should be acknowledged when discussing Walworth County's economy.

"The big picture is the county needs balance," Bretl said. "It can't be an entire bedroom community, but by the same token you can't just have factories."

"You need a mix to keep things diverse."

Eisenberg is a senior economist at the National Association of Home Builders in Washington, D.C., and was commissioned by the Lakeland Builders Association to develop a study on how homebuilding affects the Walworth County economy. He presented his findings Tuesday morning at gathering of local business leaders at Gateway Technical College in Elkhorn.

Walworth County is doing well on the housing market, Eisenberg said. The local housing market is relatively stable and improving, and he credited the area's spending patterns and tourism.

But he would like local governments to realize it would be hard to continue to grow without investing on housing.

The housing market, Eisenberg said, provides jobs, income and tax revenue to residents and local governments. Housing, jobs and infrastructure together are the keys for growth, he added.

He mentioned places such as Charlotte, N.C., and Dayton, Ohio, where the housing market halted and, subsequently, so did the economy.

On the other hand, he said, places such as Atlanta and Las Vegas, where the housing markets continue to grow, there is a clear pattern of a blooming economy.

"There is a misconception that housing doesn't pay its way," Eisenberg said.

But he said his study shows home construction has the power to boost local economies and subsidize older houses that don't generate as much capital.

The report presented by Eisenberg on Tuesday shows the impact of building 700 single-family housing units based on construction activity in Walworth County in 2008.

According to the study, building 700 single-family homes could bring $122.6 million in local income, $11.2 million in taxes and other revenue for local governments and 2,922 local jobs.

The ongoing, annual local impact includes $21.1 million in local income, $5.2 million in taxes and other revenue for local governments and 551 local jobs.

He also estimated the impact of building 200 multifamily housing units.

Initially, the one-year local impact could be $27.7 million in local income, $2.6 million in taxes and other revenue for local governments and 711 local jobs. After that, the ongoing, annual local impact includes $5.6 million in local income, $1.3 million in taxes and other revenue for local governments and 146 local jobs.