Impact more than tax revenue

By HOLLY SCHOENSTEIN

The GM jobs addition will have a positive effect on the area’s housing industry.

YOUNGSTOWN — Be prepared for the Mahoning Valley’s economy to ripple with the addition of 1,400 jobs at the General Motors Corp. plant in Lordstown, industry experts have said.

A combination of newly created positions and the transfer of employees from other GM and Delphi Corp. plants will bring in more than $450,000 in income tax dollars to Lordstown, which has an income tax rate of 1 percent.

But the addition of a third shift at the beginning of August will bring more than just income tax revenue.

The Regional Chamber completed a computer modeling project to determine how the jobs will affect various aspects of the local economy.

“The ripple effect from General Motors is phenomenal when you sit down and think about it,” Lordstown Mayor Michael Chaffee said.

“It’s beyond that [additional income tax revenue],” he added later. “Jobs stay here. That helps schools stay here. That helps restaurants stay open. The psychology of good news breeds good news.”

In addition to the jobs that will be added to the plant, 980 jobs will be created indirectly as a result of increased demand at hospitals, restaurants and other businesses, according to the computer model.

The housing market is also likely to feel the impact.

Most of the telephone calls Andrea Lupton, president of the Warren Area Board of Realtors, has received have been inquiries about buying homes in the area. A small percentage of the callers have requested information about rental properties.

She described the effect on the housing market as wonderful. Even if some people rent before buying homes, the rent will boost the economy, she said.

“What a great place for them to relocate because of affordable housing and interest rates. Once they get here, they’ll see the value of living in the Valley and in making this their community,” she said.

Lupton was not able to estimate how much home sales are expected to grow but believes there is a 50 percent chance employees who will relocate will settle in Warren.

In anticipation of the growing number of people looking to relocate, Warren Mayor Michael O’Brien said the city is considering more attractive housing packages, which he hopes to make public in about a month.

“If they’re first-time homebuyers, we have a first homebuyers program in the city,” he said. “We look forward to future residents making Warren their homes because of the low cost of living and the new schools. The time couldn’t have been any more perfect.

“We have an opportunity, and we need to take advantage of it,” he said, referring to the 6,000 homes he estimated are for sale in Warren.

As far as construction of new homes, some builders also have noticed an increase in business, said Terry Abrams, executive director of the Homebuilders Association of Mahoning Valley.

He said some builders have been able to sell some or all homes that were built, without customizing, in anticipation of buyers wanting to buy immediately and have seen an increase in contract homes, those which are custom-made for buyers.

Abrams predicted the ripple effect on the economy will be cyclical — renters will buy their first homes, homeowners will upgrade to larger homes, and empty nesters will downsize.

“We will prosper from it; other businesses will prosper from it ...,” Abrams said.

hschoenstein@vindy.com