Tuesday, 2 December 2014

Measuring the economic impact of Welsh housing associations

Since 2008 the big focus has been on the ‘global economic crisis’, the ‘banking crisis’, the ‘Eurozone crisis’ et al and even the latest G20 forum is concerned about the problems and challenges still facing the global economic community. That’s the big picture - a picture of recession, austerity and contraction. But at a local level here in Wales, there are some successes to consider. One of those is highlighted in the Wales Economy Research Unit’s report, at Cardiff University, commissioned by Community Housing Cymru. In the time since ‘the crisis’, housing associations in Wales have added 63,000 new houses – an increase of 66%. Impressive figures, but the story which underpins these figures is important too. And let’s remember that 63,000 buildings of ‘bricks and mortar’ means 63,000 new homes. Homes where people feel safe and secure and can begin to plan their futures with confidence.

Let’s unpack the figures a little more:

In 2013/14, housing associations in Wales spent 91 pence per day for every person in Wales. While that is less than a pint of beer and not even half a large cappuccino, the sector has made that 91 pence go a long way. The money that has been spent directly by Welsh housing associations has generated another 91p per person per day indirectly, because every penny spent is income for somebody else. Housing associations pay a painter to redecorate a house. The painter buys paint and pays wages. The person receiving the wages buys food. This is the multiplier effect, and this year the housing association sector has had a combined economic impact of £2bn, 81% of which has stayed in Wales.

That underpins 8,400 full time equivalent jobs in Wales and a further 12,950 jobs supported in the economy. Looking at Wales as a whole, this equates to almost 1 in 70 people. Therefore 1 in 70 of those employed in Wales have a job that is, in one way or another, supported by the housing association sector. Investment in housing has clear wider benefits, and the challenge for housing associations is to continue to increase that 91p per person per day to build even more homes and create even more jobs across Wales. They seem to be doing a pretty good job.

You can read the WERU report here.

Christopher Parry, Senior Lecturer, Banking & Finance
Cardiff School of Management, Cardiff Metropolitan University

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