new home building impact in lee county, florida · 2016. 10. 28. · october 25, 2013 lee county,...
TRANSCRIPT
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Presented by:
David Crowe – Chief Economist
October 25, 2013Lee County, Florida
Home Building Impact in Lee County, Florida
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Why do this?
• Some say housing doesn’t pay for itself.
• What are the true costs and benefits?
• Is there an objective approach?
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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
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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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• Typical relationship is that more jobs require more homes
• But, also true that more homes produce more jobs………
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Phase I CONSTRUCTION
Value of Construction+
Services Provided at Closing+
Permit / Hook-up / Impact Fees
Model of the Local Economy
Local Income and Taxes
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Phase II RIPPLE
Spending on Locally Produced
Goods and Services
Model of the Local Economy
Local Income and Taxes
Local Income and Taxes
from Phase I
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Phase III OCCUPANCY
Spending on Locally ProducedGoods and Services
Model of the Local Economy
Local Income and Taxes
Income of Occupant in New Housing Unit
+Increased Property Taxes
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Cape Coral – Fort Myers MSALee County, Florida
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Assumptions of the Model
Inputs To Model Single-family Multifamily
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
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Economic Impact of Single-family & Multifamily Home Building
1st - Construction phase
2nd - Ripple effect from construction phase
3rd - Occupancy phase
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FIRST YEAR IMPACT: Single-family Construction - Every 100 Homes
INCLUDING:
192 Jobs in Construction42 Jobs in Wholesale and Retail Trade22 Jobs in Business and Professional Services
* One job represents enough work to keep one worker employed full-time for a year.
Local Income Local TaxesLocal Jobs
Supported
$15,837,000 $1,175,000 278
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FIRST YEAR IMPACT: Multifamily Construction - Every 100 Homes
INCLUDING:
113 Jobs in Construction24 Jobs in Wholesale and Retail Trade13 Jobs in Business and Professional Services
* One job represents enough work to keep one worker employed full-time for a year.
Local Income Local TaxesLocal Jobs
Supported
$9,209,000 $674,100 162
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FIRST YEAR IMPACT: Single-family Ripple
INCLUDING:
37 Jobs in Wholesale and Retail Trade19 Jobs in Eating and Drinking Places17 Jobs in Health, Education and Social Services 14 Jobs in Local Government
Local Income Local TaxesLocal Jobs
Supported
$7,328,800 $1,459,700 137
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FIRST YEAR IMPACT: Multifamily Ripple
INCLUDING:
22 Jobs in Wholesale and Retail Trade11 Jobs in Eating and Drinking Places10 Jobs in Health, Education and Social Services 8 Jobs in Local Government
Local Income Local TaxesLocal Jobs
Supported
$4,256,000 $848,300 80
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Total Single-family Impact: First Year
Construction & Ripple
Local Income Local TaxesLocal Jobs
Supported
$23,165,800 $2,634,700 415
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Total Multifamily Impact: First Year
Construction & Ripple
Local Income Local TaxesLocal Jobs
Supported
$13,465,000 $1,522,400 242
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ONGOING Single-familyANNUAL EFFECT
INCLUDING:
16 Jobs in Wholesale and Retail Trade8 Jobs in Eating and Drinking Places8 Jobs in Local Government7 Jobs in Health, Education and Social Services
Local Income Local TaxesLocal Jobs
Supported
$3,044,300 $1,037,700 61
42% from real
estate tax
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ONGOING Multifamily ANNUAL EFFECT
INCLUDING:
14 Jobs in Wholesale and Retail Trade7 Jobs in Eating and Drinking Places6 Jobs in Local Government5 Jobs in Health, Education and Social Services
Local Income Local TaxesLocal Jobs
Supported
$2,832,000 $781,800 49
37% from real
estate tax
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NEW HOMES REQUIRE:
• Fire and police protection• Garbage collection• Parks and recreational opportunities• Roads• Correctional facilities• Primary and secondary education • Etc.
INFRASTRUCTURE
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Where’s Data/Facts?
• Local government budgets
• Federal government surveys
• Model estimating relationships
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Required Current Expenses per Unit in Lee County
Function Single-family Multifamily
Education $1,290 $774
Police Protection $481 $364
Fire Protection $411 $311
Corrections $139 $105
Streets and Highw ays $151 $116
Water Supply $132 $69
Sew erage $109 $57
Health Services $1,730 $1,310
Recreation and Culture $410 $310
Other General Government $747 $566
Total $5,600 $3,983
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Required Capital per UnitIn Lee County
Function Single-family Multifamily
Schools $3,640 $2,183
Hospitals $284 $215
Other Buildings $365 $277
Highw ays and Streets $1,966 $1,505
Conservation & Development $1 $1
Sew er Systems $2,243 $1,174
Water Supply $194 $102
Other Structures $1,326 $1,004
Equipment $293 $222
Total $10,313 $6,682
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Does new construction pay for itself?
The benefits of construction
&
The costs of construction
Now that we know:
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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
Yes it does!
Year
Current
Expenses Revenue
Operating
Surplus
Capital Invest.
Start of Year
Interest
On Debt Income
1 280,000 3,153,500 2,873,500 1,031,200 38,500 1,803,800
2 560,000 1,037,700 477,700 0 0 477,700
3 560,000 1,037,700 477,700 0 0 477,700
4 560,000 1,037,700 477,700 0 0 477,700
5 560,000 1,037,700 477,700 0 0 477,700
6 560,000 1,037,700 477,700 0 0 477,700
7 560,000 1,037,700 477,700 0 0 477,700
8 560,000 1,037,700 477,700 0 0 477,700
9 560,000 1,037,700 477,700 0 0 477,700
10 560,000 1,037,700 477,700 0 0 477,700
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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
0
2
4
6
8
10
12
14
16
18
20
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
$Million
Year
Costs Compared to Revenue: Single Family
Cumulative Cost
Cumulative Revenue
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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
Yes it does!
Year
Current
Expenses Revenue
Operating
Surplus
Capital Invest.
Start of Year
Interest
On Debt Income
1 199,100 1,913,300 1,714,200 668,300 24,900 1,021,000
2 398,200 781,800 383,600 0 0 383,600
3 398,200 781,800 383,600 0 0 383,600
4 398,200 781,800 383,600 0 0 383,600
5 398,200 781,800 383,600 0 0 383,600
6 398,200 781,800 383,600 0 0 383,600
7 398,200 781,800 383,600 0 0 383,600
8 398,200 781,800 383,600 0 0 383,600
9 398,200 781,800 383,600 0 0 383,600
10 398,200 781,800 383,600 0 0 383,600
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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
0
2
4
6
8
10
12
14
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
$Million
Year
Costs Compared to Revenue: Multifamily
Cumulative Cost
Cumulative Revenue
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David Crowe
The Lee County Impact of Home Building