1 / 20

Home Building Impact

Home Building Impact. David Crowe Chief Economist November 13, 2013. WHY Reject New Homes. Property tax is insufficient to pay for new service demands New homes bring traffic congestion, crowded schools, ‘different’ neighbors Environmental damage Fields and forests disappear.

luce
Download Presentation

Home Building Impact

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Home Building Impact David Crowe Chief Economist November 13, 2013

  2. WHY Reject New Homes • Property tax is insufficient to pay for new service demands • New homes bring traffic congestion, crowded schools, ‘different’ neighbors • Environmental damage • Fields and forests disappear

  3. 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

  4. Areas Covered by NAHB Local Impact Studies(Over 750 Done So Far)

  5. HOUSING = JOBS • Typical relationship is that more jobs require more homes • But, also true that more homes produce more jobs………

  6. Value of Construction + Services Provided at Closing + Permit / Hook-up / Impact Fees Model of the Local Economy Local Income and Taxes Phase I CONSTRUCTION

  7. Local Income and Taxes from Phase I Spending on Locally Produced Goods and Services Model of the Local Economy Local Income and Taxes Phase II RIPPLE

  8. Income of Occupant in New Housing Unit + Increased Property Taxes Spending on Locally Produced Goods and Services Model of the Local Economy Local Income and Taxes Phase III OCCUPANCY

  9. Assumptions of the Model Inputs To ModelSingle-family Average house price: $321,000 Average raw lot cost: $40,000 Permits/Infrastructure: $7,915 Annual property taxes: $2,810

  10. Economic Impact of Single-family & Multifamily Home Building • 1st - Construction phase • 2nd - Ripple effect from construction phase • 3rd - Occupancy phase

  11. FIRST YEAR IMPACT: Single-family Construction - Every 100 Homes INCLUDING: 147 Jobs in Construction 32 Jobs in Wholesale and Retail Trade 17 Jobs in Business and Professional Services * One job represents enough work to keep one worker employed full-time for a year.

  12. FIRST YEAR IMPACT: Single-family Ripple INCLUDING: 29 Jobs in Wholesale and Retail Trade 15 Jobs in Eating and Drinking Places 17 Jobs in Health, Education and Social Services 12 Jobs in Local Government

  13. Total Single-family Impact: First Year Construction & Ripple

  14. ONGOING Single-family ANNUAL EFFECT 38% from real estate tax INCLUDING: 14 Jobs in Wholesale and Retail Trade 7 Jobs in Eating and Drinking Places 5 Jobs in Local Government 7 Jobs in Health, Education and Social Services

  15. NEW HOMES REQUIRE: INFRASTRUCTURE • Fire and police protection • Garbage collection • Parks and recreational opportunities • Roads • Correctional facilities • Primary and secondary education • Etc.

  16. Where’s Data/Facts? • Local government budgets • Federal government surveys • Model estimating relationships

  17. Required Current Expenses per Unit

  18. Required Capital per Unit

  19. Now that we know: The benefits of construction & The costs of construction Does new construction pay for itself?

  20. Yes it does! • For each single-family unit -- • By the end of the 2ndyear economic impacts offset fiscal costs. • By the end of the 2ndthe debt is fully paid off • By the 3rd year, net is $289,900 thereafter

More Related