Economic and Fiscal Impact of First-Time Homebuyer Savings Accounts in Ohio

The Ohio Association of REALTORS (OAR) commissioned AEG to estimate the potential impact of a proposed first-time homebuyer savings account (FHSA) program in Ohio that would allow residents to deposit and withdraw funds from a tax-sheltered savings account as long as those funds are used to purchase a home.

To determine the economic impact of the program, we reviewed FHSA programs in other states and evaluated other home purchase incentive programs. We determined that any increase in home sales caused by the program would result in increased purchases of construction and financial services across Ohio. We then built a custom input-output model to account for the characteristics of the proposed program. Our model projected the total increase in sales by businesses, household earnings, and employment associated with the program. We also estimated the fiscal impact of the program, accounting for increased income, sales, and real estate taxes that would be collected as a result of the program, as well as tax revenue lost from consumers using tax-sheltered FHSAs.

We found that the program would result in nearly 900 additional home sales over the next ten years, with the net economic impact of the program reaching $3 million annually after ten years. These increased home sales would support nearly 30 jobs annually after ten years. We also determined that the net fiscal impact of the program on the State of Ohio would be negligible. The program would lead to decreased income tax revenue as income tax filers set money aside in their accounts. However, the program would also lead to increased tax revenue stemming from new economic activity spurred by the program, as well as increased property transaction tax collections.

OAR used the Anderson Economic Group report to inform their lobbying efforts for the program.

OH Realtors FHSA Impact Final Report

OH Realtors Study Overview