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THE METRO AREA IMPACT OF HOME BUILDING IN WHITE COUNTY, GEORGIA Presented by Elliot F. Eisenberg, Ph.D. National Association of Home Builders September 27, 2007 Asheville, NC LOCAL ECONOMIC IMPACT Construction phase Jobs Materials Local fees, taxes, contributions

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THE METRO AREA IMPACT OF HOME BUILDING IN WHITE COUNTY, GEORGIA

Presented

by

Elliot F. Eisenberg, Ph.D.

National Association of Home Builders

September 27, 2007

Asheville, NC


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LOCAL ECONOMIC IMPACT

  • Construction phase

    • Jobs

    • Materials

    • Local fees, taxes, contributions

  • Ripple or feed-back from construction

    • Wages spent in local economy

  • Occupancy phase

    • Earnings spent in local economy


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HOUSING => JOBS


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CONSTRUCTION PHASE

VALUE OF CONSTRUCTION

INPUTS:

¨

SERVICESPROVIDED AT CLOSING

¨

PERMIT/HOOK-UP/IMPACT FEES

(Info Obtained From Local Sources)

MODEL OF THE LOCAL ECONOMY

OUTPUTS:

INCOME FOR LOCAL RESIDENTS

¨

TAX/FEE REVENUE

FOR LOCAL GOVERNMENTS


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MODEL OF THE LOCAL ECONOMY

RIPPLE PHASE

INPUTS:

LOCAL INCOME & TAXES

FROM PHASE I

SPENDING ON

LOCAL GOODS AND SERVICES

Consumer Expenditure Survey

(U.S. Bureau of Labor Statistics)

OUTPUTS:

LOCAL INCOME & TAXES


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OCCUPANCY PHASE

INPUTS:

INCOME OF HOUSEHOLD

OCCUPYING NEW HOUSING UNIT

SPENDING ON

LOCAL GOODS AND SERVICES

¨

PROPERTY TAX PAYMENTS

MODEL OF THE LOCAL ECONOMY

OUTPUTS:

LOCAL INCOME & TAXES


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The White County, GA

Multiplier

Only Captures

Spending that Stays in the County

Includes:

Banking, Car Repair, Dry Cleaning

Day Care Services, Legal Services

Newspaper Delivery, and Restaurants

But not:

Auto Manufacturing, Mattress Manufacturing, Movie Production, and Travel Agency Services



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History of the Model

  • Over 470 eco. impact analyses performed

    Users of the model include:

    Boone County Kentucky

    Habitat for Humanity, International

    MI State Housing Development Authority

    Michigan State University

    Missouri Housing Development Commission

    Univ. of Florida

    Univ. of Massachusetts

    Univ. of Montana

    West Virginia Housing Development Fund…


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Assumptions of the Model

Single Family

Average house price: $252,905

Average raw lot cost: $22,212

Permit/Impact fees: $1,500

Annual prop. taxes: $2,205

  • Average house price


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Economic Impact of Single Family Home Building

  • Construction phase

  • Ripple effect from construction phase

  • Occupancy phase

  • Ten year total


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FIRST YEAR IMPACT: SF Construction

100 SF Homes

INCLUDING:

217 Jobs in Construction

47 Jobs in Wholesale & Retail Trade

27 Jobs in Business and Professional Services


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FIRST YEAR IMPACT: SF Ripple

INCLUDING:

34 Jobs in Wholesale and Retail Trade

24 Jobs in Local Government

18 Jobs in Health, Education & Social Services


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ONGOING SF ANNUAL EFFECT

INCLUDING:

23 Jobs in Wholesale and Retail Trade

12 Jobs in Local Government

12Health, Education & Social Services


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TOTAL SF IMPACT:

FIRST TEN YEARS

Along with 455 temporary jobs

and 95 permanent ones!


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BUT

NEW HOMES REQUIRE:

INFRASTRUCTURE

  • Fire and police protection

  • Garbage collection

  • Parks and recreational opportunities

  • Roads

  • Primary and secondary education

  • Etc…




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Now that we know:

The benefits of construction

&

The costs of construction

Does new construction pay for itself?


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Yes it does!

For every 100 single family units--

  • By the 2nd year economic impacts offset fiscal costs

  • By the end of the 2nd year the debt is fully paid off

  • In the 2nd year, net is $234,191 and is $241,371 thereafter


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Over 15 years, every 100 SF units generate a cumulative $8.4 million in revenue for local governments—but only $5.2 million in costs


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Almost done, just a bit more million in revenue for local governments—but only $5.2 million in costs


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What does 2 years really mean? million in revenue for local governments—but only $5.2 million in costs

  • Is it OK, or should it be done faster?

  • Big purchases take time to pay off.

  • Car loans now last 5 years, and many lease!

  • How fast did you pay off your student loans?

  • How fast are your kids paying off theirs?

  • Did you pay off your home in 12 years?


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A Closer Look at million in revenue for local governments—but only $5.2 million in costsPrimary and Secondary Ed.

  • 12.6% attend Private Schools

  • 1.7% are Home schooled

  • 0.4 school age children / MF unit

  • 0.6 school age children / SF unit

  • State aid is $16.5 million or 67% of budget


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How Large Are Non Property Tax Revenues million in revenue for local governments—but only $5.2 million in costs

  • SF property taxes are$2,205/year

    But, yearly revenue is $5,114/unit per year, which is 132% more.

  • Clearly, property taxes are not the whole story!


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QUESTIONS? million in revenue for local governments—but only $5.2 million in costs

  • Elliot F. Eisenberg, Ph.D.

  • Call: 202.266.8398

  • Fax: 202.266.8426

  • [email protected]

  • 1201 15th Street NW

  • Washington, DC 20005-2800


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