Housing: Owning, Buying, Selling, and Renting


Owner-occupied dwellings is a Special Sector developed by the BEA to ensure consistency in the flow of funds. 

Owner-occupied dwellings is necessary to include as an Industry in IMPLAN because home-ownership generates wealth (the home can be rented out to others or saves the owner from having to pay rent); the Value Added portion of this Industry is counted as part of GDP along with the Value Added of every other Industry in the country. Owning and maintaining a home is also a major area of spending for homeowners; this Industry captures the economic effect.

The Owner-occupied dwelling Industry Production Function only contains:

  • Output = Total value of home ownership
  • Intermediate Inputs = Non-mortgage commodity spending 
  • Taxes on Production and Imports (TOPI) = largely made up of Property Tax 
  • Other Property Income (OPI) = difference between the rental value of the home and the non-mortgage costs of home ownership (Output - Intermediate Inputs - TOPI); Mortgage Interest is included in OPI 

Here’s the Industry Detail for the U.S. 2018 Economy:


Note there is no Employment or Labor Income generated in this Industry.  Below, the components of production have been converted to percentages of Output for the Industry as a whole in the U.S. 2018 Economy: 


Notice in the screenshot below, Industry 449 does not exist in the NAICS Bridge (546 Industry Scheme) because the industry does not correspond to a NAICS Code. NAICS Codes are used to classify business establishments. The Owner-occupied dwellings Industry is not a business establishment and therefore does not have a NAICS Code.  


The owner-occupied dwelling Industry is different from the other two real estate related Industries in IMPLAN, Industry 448 Tenant-occupied housing and Industry 447 Other Real estate. 

Tenant-occupied housing (448) includes the value of operations for lessors of residential rentals.

Other Real estate (447) includes the value of operations for residential property managers, lessors of nonresidential buildings, and offices of real estate agents and brokers (offering services other than residential leasing).

Owner-occupied dwelling and Tenant-occupied housing are the number one and three Industries (in the U.S. 2018 Economy) in terms of Total Household Demand. Logically this seems very appropriate as they respectively represent the value of home-ownership and home renting/leasing. 


The economic effect of rent payments associated with some Event is accounted for in the Induced Effects in the Results of the given Event when analyzed in IMPLAN. 

If you’d like to directly analyze rent payments (made to a leasing establishment as opposed to a home-owner), the total value of rent payments can be analyzed via an Industry Output Event in the Industry 448 - Tenant-occupied housing.  When analyzing this Industry, the necessary service of renting out the property via a property manager will be captured as an Indirect Effect to IMPLAN Industry 447 - Other real estate. This is because property management service is an Intermediate Input that Tenant-occupied housing purchases from Other real estate. 


The economic effect of home-ownership costs associated with some Event is accounted for in the Induced Effects estimated in the Results of the given Event when analyzed in IMPLAN. 

Mortgage payments are not included in any Industry

The exchange of cash for principal is essentially an asset swap. Input-Output models do not account for existing assets - only annual change (e.g., net savings, new construction, equipment purchases). This means mortgage payments are an asset swap and are not part of the current accounts, and are therefore not included in any Industry. An Industry's production function only includes current accounts; it does not include investment. 

Households make a payment to the capital institution in IMPLAN. This payment is accounted for when analyzing Household Income Events. The payment is net savings, which includes paying down debt (i.e., principle). Mortgage payments are included in this payment to capital by Households.

Homeowners Renting Out Their Home

When a homeowner rents out their home, either to a vacationer or a resident, the income they earn is often used to pay their mortgage and maintain the home. The surplus income they earn can be spent in a variety of ways. 

Rent income earned by a homeowner can be analyzed via a Household Income Event. The Event Value should not include any fees for the paid service of property management. This approach assumes the homeowner will distribute the income like any other income earned. As mentioned in the previous section, Household Income Events accounts for the Household Income groups average net savings (net payments to capital). The portion of total Household Income for the income group that is allocated to net savings in the Region and Data Year is assumed to be the portion of every dollar entered in a Household Income Event that will be allocated to net savings. Because the capital institution in IMPLAN is not internalized in the Multipliers, there will be no effect in the Results from income allocated to capital. In other words, IMPLAN does not assume how capital payments will be spent, so these payments are treated as leakage. Another portion, accounting for income taxes, is also treated as a leakage. 

The remaining Household Income is distributed across the average makeup of Commodities purchased by the given income group. Commodities purchased with this Household Income that are produced by Industries within the Region generate Induced Effects. 

The allocation of Household Income includes a payment to IMPLAN Industry 449 - Owner-occupied dwellings which represents the value of the house as if it was rented. Owner-occupied dwellings pay for repair and maintenance services, real estate fees, and bank financing fees (such as refinancing a mortgage). These payments generate the iterations of Induced Effects from owning, repairing, and maintaining the home. Owner-occupied dwellings also pay taxes (largely property taxes). Once again, tax revenue is treated as a leakage. The residual going to Other Property Income is considered "imputed income" for households and includes mortgage interest. OPI is another leakage in IMPLAN.  

Analyzing rent income to a homeowner via a Household Income Event is not perfect because the allocation of Household Income, after accounting for leakages, is an average for all households in that income group, not just the homeowners. Because spending by households that do pay rent are included in these averages, Tenant-occupied housing will also receive a payment.  

Buying and Selling a Home

The cost associated with buying a constructed home is included in the cost of owning a home. The net income gained when a home is sold can be analyzed only if where, when, and on what the income will be spent is known. If the seller of the home uses the income to buy another house in the Region you may have real estate and financing fees for the new mortgage that can be analyzed accordingly. If the seller of the home is moving out of the Region, which is often the case, there is no impact to the Selected Region.   

Building a Home

Constructing a new home does of course create an impact due to the need for materials and labor.  The cost of constructing a home can be analyzed via an Industry Output Event in the Construction of new single-family residential structures Industry. More information on considerations when analyzing construction are found in the article Construction: Building the Analysis.


Total Regional Homeowners’ Property Tax

The Taxes on Production and Imports (TOPI) for IMPLAN Industry 449 - Owner-occupied dwellings is made up largely of property taxes, therefore you can identify the total property taxes paid on homes as approximately the value of TOPI for IMPLAN Industry 449 - Owner-occupied dwellings. This value can be found in the Region Details in 

       Study Area Data  

              > Industry Detail (shown for U.S. in screenshot above)

              > Find the row for the Owner-occupied dwellings Industry and the intersecting                                                column for TOPI. 

Homeowner Property Tax Effects 

The ratio of total TOPI to total Output in a given Region for a given Industry is called the TOPI coefficient. This coefficient can be found in Region Details  

         Social Accounts 

                  > Balance Sheets

                           > Industry Balance Sheet 

                                  > Value Added tab

                                  > Filter by Owner-occupied dwellings Industry, find the TOPI coefficient. 

The TOPI coefficient for IMPLAN Industry 449 - Owner-occupied dwellings can be multiplied by the value of Owner-occupied dwelling Output generated in your IMPLAN Results to calculate the associated approximate value of Property Taxes paid by homeowners on their homes. 

You can find the Owner-occupied dwelling Output effects generated in your IMPLAN Results by navigating to the Output tab of your Results. Find the Owner-occupied dwelling row in the Industries by Impact table (sort by Induced Effects). Here you’ll see the Output Effects to the industry. Unless you analyzed an Event in the Owner-occupied dwelling Industry, you will only see Induced Output to this Industry.



Written March 20, 2020

Updated March 29, 2021