Real estate contributes to local economies through construction and building operations, through the way development affects roads and utilities, and through property taxes that help fund public services. Those effects depend on the type and location of development: a modeled comparison across 10 U.S. states found lower infrastructure costs and higher property-tax revenue per acre for homes near existing destinations than for homes at the urban edge. These are estimates of associated activity and costs—not proof that every project creates net growth or pays its full public cost.
How real estate supports jobs and economic activity
Real estate has two broad economic phases. Planning and construction generate spending and temporary work; once buildings are occupied, their operations and the businesses and households using them support ongoing activity. The distinction matters: a construction job-year is not necessarily a permanent job, and an estimate of jobs supported is not a count of newly created jobs.
Commercial development and building operations
The CREDA Research Foundation’s 2026 U.S. edition estimates that new commercial-building development combined with operations of existing commercial buildings in 2025 involved $1.4 trillion in direct expenditures and supported $3.5 trillion in GDP, $1.3 trillion in personal earnings and 20.4 million jobs. These are modeled contributions across development and operations, drawing on government and industry datasets; they do not mean commercial real estate alone caused all of that activity or that all reported jobs were new. CREDA Research Foundation’s 2026 contribution report
Affordable housing example: a defined local sample
An Urban Institute analysis of 45 Oklahoma multifamily developments funded through the Low-Income Housing Tax Credit (LIHTC) program estimated 4,043 construction job-years and nearly $814 million in construction output. The projects, completed from 2019 through 2023, included 2,667 units and $295 million in combined federal and state tax-credit equity. The analysis also estimated more than $186 million in potential output over 10 years of operations and tax revenue that could exceed $126 million across construction and operations. The figures are in 2024 dollars and use IMPLAN for economic activity alongside local assessor and tax-rate data for property taxes; they describe this sample, not all affordable housing or a national multiplier. Urban Institute’s Oklahoma LIHTC analysis
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A different geography and property segment: the UK
RICS estimated that the UK commercial real-estate sector contributed 3.3% of UK gross value added (GVA), 2.5% of tax revenue and 3.5% of the workforce through direct, indirect and induced activity. Published in 2022, those are UK-wide sector estimates, not a current forecast for a particular town or a result directly comparable with the U.S. studies above. RICS’ 2022 UK commercial-property impact report
How development location changes infrastructure costs
New housing can use infrastructure already in place or require public agencies to extend roads and water or sewer connections. A 2026 Pew report on modeling by WRI and ECOnorthwest compared homes near existing jobs, stores and transit with housing at the urban fringe across Arizona, Florida, Maryland, Minnesota, Montana, New Hampshire, North Carolina, Pennsylvania, Texas and Washington.
| Measure | Near existing jobs, stores and transit | Urban-fringe comparison |
|---|---|---|
| Upfront infrastructure cost per home | About $21,000 lower on average across the modeled 10 states than at the fringe | Higher on average than in established areas |
| Average infrastructure maintenance cost | 50% lower than for fringe homes | Higher on average than near existing destinations |
| Property-tax revenue per acre | 13% higher on average across the modeled states | Lower on average than near existing destinations |
| Modeled infrastructure payback period | Nine years on average | 13 years on average |
These modeled averages reflect differences in land-use patterns and the ability to use existing roads and utility connections. They are not guaranteed outcomes for a specific project: housing form and density vary, and the analysis does not account for differences in who funds infrastructure construction and maintenance, including private, local, state and federal sources. Pew’s 2026 report on infrastructure costs and housing location
How property taxes connect development to local services
Occupied and developed land can add to the local property-tax base, one source of funding for municipal services and infrastructure. The National League of Cities’ 2026 Municipal Infrastructure Conditions report says property taxes represent 60% of municipal tax revenue and that nearly 90% of cities rely on them. These are national figures about municipal revenue and reliance, not a promise that a particular development will produce enough tax revenue to cover its public costs. Local tax mixes differ, and capital decisions also depend on factors such as funding availability, staff capacity, strategic plans and elected officials’ priorities. The report notes that federal grants have been particularly valuable for transportation and water projects. National League of Cities’ 2026 infrastructure report
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What the figures can—and cannot—tell you about local growth
Impact estimates answer different questions. A national commercial-property estimate combines development and existing-building operations; the Oklahoma LIHTC analysis concerns a defined set of affordable multifamily projects; the Pew comparison models infrastructure and tax outcomes by housing location. These figures should not be added together or treated as interchangeable forecasts.
- Jobs and output: Check whether a figure covers construction, ongoing operations, or both, and whether it reports job-years, jobs supported, or a count of new permanent positions.
- Public costs: Ask whether the estimate includes upfront roads and utilities, future maintenance and replacement, and which level of government or funding source bears each cost.
- Tax revenue: Distinguish revenue per acre from total revenue, and compare it with the services and infrastructure required—not just the development’s headline tax contribution.
- Time and place: Keep the geography, property type, study period, dollars and modeling method attached to every estimate. A national sector share is not a local project forecast.
The UK government also commissioned research on new office, manufacturing and warehousing property using eight case studies and econometric analysis of employment, turnover, wages and productivity. Its published summary describes the approach but does not report effect sizes, so it does not support a numerical estimate of local impact. UK government study of commercial-property investment and local economic effects
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