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Home Building Impact in Lee County, Florida

Home Building Impact in Lee County, Florida. Presented by : David Crowe – Chief Economist October 25, 2013 Lee County, Florida. Why do this?. Some say housing doesn’t pay for itself. What are the true costs and benefits? Is there an objective approach?. What Does NAHB Offer?.

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Home Building Impact in Lee County, Florida

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  1. Home Building Impact in Lee County, Florida Presented by: David Crowe – Chief Economist October 25, 2013 Lee County, Florida

  2. Why do this? • Some say housing doesn’t pay for itself. • What are the true costs and benefits? • Is there an objective approach?

  3. What Does NAHB Offer? • A model-based approach • Full look at economic benefits • Accurate accounting of fiscal costs • In nearly all cases, housing does pay for itself

  4. 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

  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. Cape Coral – Fort Myers MSALee County, Florida

  10. Assumptions of the Model Inputs To ModelSingle-familyMultifamily Average house price: $326,040 $195,164 Average raw lot cost: $11,826 $9,391 Permits/Infrastructure: $2,492 $1,446 Annual property taxes: $4,314$2,909

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

  12. FIRST YEAR IMPACT: Single-family Construction - Every 100 Homes INCLUDING: 192 Jobs in Construction 42 Jobs in Wholesale and Retail Trade 22 Jobs in Business and Professional Services * One job represents enough work to keep one worker employed full-time for a year.

  13. FIRST YEAR IMPACT: Multifamily Construction - Every 100 Homes INCLUDING: 113 Jobs in Construction 24 Jobs in Wholesale and Retail Trade 13 Jobs in Business and Professional Services * One job represents enough work to keep one worker employed full-time for a year.

  14. FIRST YEAR IMPACT: Single-family Ripple INCLUDING: 37 Jobs in Wholesale and Retail Trade 19 Jobs in Eating and Drinking Places 17 Jobs in Health, Education and Social Services 14 Jobs in Local Government

  15. FIRST YEAR IMPACT: Multifamily Ripple INCLUDING: 22 Jobs in Wholesale and Retail Trade 11 Jobs in Eating and Drinking Places 10 Jobs in Health, Education and Social Services 8 Jobs in Local Government

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

  17. Total Multifamily Impact: First Year Construction & Ripple

  18. ONGOING Single-family ANNUAL EFFECT 42% from real estate tax INCLUDING: 16 Jobs in Wholesale and Retail Trade 8 Jobs in Eating and Drinking Places 8 Jobs in Local Government 7 Jobs in Health, Education and Social Services

  19. ONGOING Multifamily ANNUAL EFFECT 37% from real estate tax INCLUDING: 14 Jobs in Wholesale and Retail Trade 7 Jobs in Eating and Drinking Places 6 Jobs in Local Government 5 Jobs in Health, Education and Social Services

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

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

  22. Required Current Expenses per Unit in Lee County

  23. Required Capital per Unit In Lee County

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

  25. Yes it does! • For each single-family unit -- • By the end of the 1st year economic impacts offset fiscal costs. • By the end of the 1st the debt is fully paid off • In the 1st year, net is $1,803,800 and is $477,700 thereafter

  26. Over 15 years, every 100 Single-family units generate a cumulative $17.7 million in revenue for local governments—but only $9.2 million in costs $8.5 million

  27. Yes it does! • For each multifamily unit -- • By the end of the 1st year economic impacts offset fiscal costs. • By the end of the 1st the debt is fully paid off • In the 1st year, net is $1,021,000 and is $383,600 thereafter

  28. Over 15 years, every 100 Multifamily units generate a cumulative $12.9 million in revenue for local governments—but only $6.5 million in costs $6.4 million

  29. The Lee County Impact of Home Building • David Crowe

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