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THE METRO AREA IMPACT OF HOME BUILDING IN THE CITIES OF TEMPLE & BELTON IN TEXAS Presented by Elliot F. Eisenberg, Ph.D. National Association of Home Builders October 16, 2007 Temple, TX LOCAL ECONOMIC IMPACT Construction phase Jobs Materials Local fees, taxes, contributions

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THE METRO AREA IMPACT OF HOME BUILDING IN THE CITIES OF TEMPLE & BELTON IN TEXAS


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the metro area impact of home building in the cities of temple belton in texas

THE METRO AREA IMPACT OF HOME BUILDING IN THE CITIES OFTEMPLE & BELTON IN TEXAS

Presented

by

Elliot F. Eisenberg, Ph.D.

National Association of Home Builders

October 16, 2007

Temple, TX

local economic impact
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
slide3
Conventional Wisdom is that more jobs produce homes
  • But, new homes produce more jobs too!

HOUSING => JOBS

slide4

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

slide5

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

slide6

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

slide8

The Killeen-Temple-Belton, TX Multiplier

Only Captures

Spending that Stays in the MSA

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

history of the model
History of the Model
  • Over 480 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…

assumptions of the model
Assumptions of the Model

Single FamilyMultifamily

Average house price: $170,781 $77,018

Average raw lot cost:$4,285$5,808

Permits/Infrastructure:$853 $461

Annual prop. taxes:$3,211 $1,802

  • Average house price
economic impact of single family home building
Economic Impact of Single Family Home Building
  • Construction phase
  • Ripple effect from construction phase
  • Occupancy phase
  • Ten year total
slide12

FIRST YEAR IMPACT: SF Construction

Every 100 SF Homes

INCLUDING:

117 Jobs in Construction

25 Jobs in Wholesale & Retail Trade

15 Jobs in Business and Professional Services

slide13

FIRST YEAR IMPACT: SF Ripple

INCLUDING:

18 Jobs in Wholesale and Retail Trade

10 Jobs in Local Government

9 Jobs in Health, Education & Social Services

slide14

ONGOING SF ANNUAL EFFECT

INCLUDING:

14 Jobs in Wholesale and Retail Trade

10 Jobs in Local Government

7Jobs in Health, Education & Social Services

slide15

TOTAL SF IMPACT:

FIRST TEN YEARS

100 HOMES

Along with 240 temporary jobs

and 63 permanent ones!

slide16

TOTAL SF IMPACT:

FIRST TEN YEARS

700 HOMES

Along with 1,680 temporary jobs

and 441 permanent ones!

biggest local employers
BIGGEST LOCAL EMPLOYERS

EMPLOYER# of FT JOBS

Scott & White 6,640

Central TX Veterans Healthcare2,686

Wilsonart International 1,681

New Single Family Construction1,680

McLane Company – Corp. HQ 1,535

T.I.S.D.1,3401,535

  • Average house price
slide18

FIRST YEAR IMPACT: MF Construction

Every 74 MF Homes

INCLUDING:

50 Jobs in Construction

7 Jobs in Business and Professional Services

6 Jobs in Wholesale & Retail Trade

slide19

FIRST YEAR IMPACT: MF Ripple

INCLUDING:

6 Jobs in Wholesale and Retail Trade

3 Jobs in Local Government

3 Jobs in Health, Education & Social Services

slide20

ONGOING MF ANNUAL EFFECT

INCLUDING:

8 Jobs in Wholesale and Retail Trade

5 Jobs in Local Government

4Jobs in Health, Education & Social Services

slide21

TOTAL MF IMPACT:

FIRST TEN YEARS

Along with 92 temporary jobs

and 38 permanent ones!

slide22

BUT

NEW HOMES REQUIRE:

INFRASTRUCTURE

  • Fire and police protection
  • Garbage collection
  • Parks and recreational opportunities
  • Roads
  • Primary and secondary education
  • Etc…
slide27

Now that we know:

The benefits of construction

&

The costs of construction

Does new construction pay for itself?

slide28

Yes it does!

For every 100 SF and 74 MF units--

  • By the 2nd year economic impacts offset fiscal costs
  • By the end of the 25th year the debt is fully paid off
  • In the 25th year, net is $228,580 and is $235,509 thereafter
slide29

Over 30 years, every 100 SF and 74 MF units generate a cumulative $23.7 million in revenue for local governments—but only $22.5 million in costs

what does 25 years really mean
What does 25 years really mean?
  • 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 25 years?
a closer look at primary and secondary ed
A Closer Look at Primary 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 $321.9 million or 66% of budget
how large are non property tax revenues
How Large Are Non Property Tax Revenues
  • SF property taxes are$3,211/year

But, yearly revenue is $5,158/unit per year, which is 61% more.

  • MF property taxes are$1,802/year

But, yearly revenue is $3,536/unit per year, which is 96% more.

  • Clearly, property taxes are not the whole story!
slide35

QUESTIONS?

  • Elliot F. Eisenberg, Ph.D.
  • Call: 202.266.8398
  • Fax: 202.266.8426
  • eeisenberg@nahb.com
  • 1201 15th Street NW
  • Washington, DC 20005-2800