Hope Resides in the Private Building Sector
The One-Year, 4.5-Million-Jobs Investment Plan
How Much Could You Save?
Read the Plan (.pdf)
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Because the private building sector represents 93% of total U.S. building stock, and building construction alone accounts for approximately 10% of the U.S. GDP, the private building sector is the key to reviving the U.S. economy. Investing $30 billion in the private building sector to provide a ‘housing mortgage interest rate buy-down’ for homes that meet or exceed the initial energy reduction target of the widely adopted 2030 Challenge will create 4.5 million new jobs and $280 billion in direct, non-federal investment and spending while opening up a new $45.7 billion renovation market that could grow to almost $1 trillion by 2030. This Plan returns to the federal government twice its investment annually through the new tax base created and can be implemented quickly through existing federal programs.
Although important, infrastructure and the public building sector cannot solve the U.S. economic crisis:
- The public building sector accounts for only 7% of total U.S. building stock.
- Public Infrastructure and building are not currently in decline.
- Compared to private building, public infrastructure and building generate very little private investment and spending.
- Public Infrastructure and building projects are dependent on strong tax revenues, which are now in decline.
- Because these projects cannot produce a sustainable tax base, the federal government will have to continue to provide funding for each new project.
- The private building sector accounts for 93% of total U.S. building stock and impacts the entire U.S. economy. Building construction alone accounts for approximately 10% of the U.S. GDP.
- In March 2009, construction of residential buildings was down 48% from March 2008, 66% from March 2007, and a staggering 75% from March 2006 with no bottom in sight.
- Over 1.7 million construction workers are now unemployed, and every sector of the U.S. economy (from wholesale, retail, distribution, manufacturing and construction to professional services, banking and development) and every industry (from steel, rubber, insulation and caulking to mechanical and electrical equipment, glass, wood, metals, tile, fabrics and paint) is reeling from the effects.
- Investing in the private building sector generates demand for construction services and products and private investment and spending on a much larger scale than public infrastructure and building projects, creating millions of more jobs.
- The large tax base generated from the new jobs, private investment and spending, and new renovation market will both pay for the Plan each year it is in effect and provide the needed funding for future public infrastructure and building projects.
The Plan requires those participating in the housing mortgage interest rate buy-down to renovate (or build new) to specific energy reduction targets. This requirement is central to the Plan, immediately creating demand for Building Sector services and products, including $45.7 billion of building renovation. It is this demand within the private building sector that generates $280 billion in private investment and spending, and it is this $280 billion in private investment and spending that makes the 4.5 million new jobs possible. Without this additional investment and spending, the number of jobs created would be far less.
Only 2.2% of total U.S. housing stock would need to participate in the One-Year, 4.5-Million-Jobs Investment Plan to create these massive economic benefits. If demand for these construction services is also generated in the remaining 97.8% of the residential sector, either through market forces or continuation of the Plan every year,the demand created could help fuel the economy for the next 40 to 50 years.
In addition, during the year the Plan is in effect, consumers will save an average of $11.8 billion in energy costs and mortgage payments, significantly reducing the risk of mortgage failure while increasing disposable income. With only 2.2% ofthe U.S. housing stock participating, on average,the Plan will reduce CO2 emissions by 13.7 MMT CO2e and on-site energy consumption by 123 TBtu. All of these benefits continue in perpetuity, so that over five years, consumers will save anaverage of $59 billion in energy costs and mortgage payments, and on average, CO2 emissions will be reduced by 68.4 MMT CO2e and on-site energy consumption by 614.6 TBtu.
If the Plan is expanded to include 20% of the housing stock, at a minimum, it would reduce CO2 emissions by 126 MMT CO2e and on-site energy consumption by 1.1 QBtu, as well as save consumers $108 billion in energy costs and mortgage payments annually. Again, these benefits continue in perpetuity, so over 5 years, consumers will save $542 billion in energy costs and mortgage payments, and at a minimum, CO2 emissions will be reduced by 628 MMT CO2e and on-site energy consumption by 5.6 QBtu.
Addressing the collapse of the private building sector is critical to stabilizing the U.S. economy. The Plan addresses this, as well as many other challenges facing the country, including energy independence and climate change. With a single investment, the U.S. can create millions of jobs, strengthen the U.S. economy, reduce CO2 emissions and energy consumption, and save consumers billions of dollars. Investing in the private building sector is the only investment that can accomplish all of these objectives.
For further information, contact:
Kristina Kershner, Director
Architecture 2030
505.988.5309
kershner@architecture2030.org
How Much Could You Save?
Read the Plan (.pdf)
Urge Your Representatives to Support the Plan
