RI: Would Marriage Equality Help Local Real Estate Market, Economy?

Gay Rhode Island Real EstateOn Wednesday, February 9th, I joined hundreds of people at the Rhode Island state house to testify before the House committee discussing bills on marriage equality. There were many people from both sides of the issue imploring the representatives to vote using their opinion as the deciding factor. It was gratifying to see democracy in action. The diversity of the state, at times, does come through. Equal rights is a cause to which I have devoted many years and I felt it necessary to be heard on this equal rights issue. While I believe wholeheartedly that the issue of marriage equality is a matter of equal rights, my role as a business executive also forces me to also focus on the economic effects to a state that does not allow same-sex marriage.

States that have marriage equality have seen an increase of talented professionals moving there. In a February 29, 2008 issue of Boston Business Journal in an article entitled “Gay marriage attracts out of state workforce,” Henry Hoey, a council member of the Greater Boston Business Council, which is a Chamber of Commerce of gay business professionals, is quoted in the article as saying “Since the marriage law was passed, we see a lot more (gay) professionals moving into the Boston area.”

There are many economic contributions derived from home sales. For each $100,000 sale of homes, there is over $28,000 generated for the economy. Here’s a calculation by the National Association of Realtors showing the amount added to the economy for each house sold. First, home construction, real estate brokerage, mortgage lending, Title insurance, rental and leasing, home appraisal, moving truck service and other related activities amounts to $21,604 per home.

Second, there is greater spending in restaurants, sports games and charity events. The size of this multiplier effect is estimated to be $12,549. Third, an additional expenditure on consumer items such as furniture, appliances and paint services is $4,541. And lastly, typically one new home is constructed for every 8 existing home sales. Therefore, for each existing home sale, 1/8 of new home value is added to the economy and is estimated in the state to be $30,006. The total is $68,700 based on the average price of a home sold in Rhode Island.

If marriage equality were legalized in RI, more same-sex couples would buy homes here because they would be afforded the same benefits and rights of survivorship of home ownership as straight couples. If gay couples added 5% to the $1.85 billion of home sales last year, that would have contributed an additional $25.9 million to the economy.

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