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

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

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  1. 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

  2. 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

  3. Conventional Wisdom is that more jobs produce homes • But, new homes produce more jobs too! HOUSING => JOBS

  4. 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

  5. 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

  6. 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

  7. 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

  8. White County, Georgia

  9. 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…

  10. 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

  11. Economic Impact of Single Family Home Building • Construction phase • Ripple effect from construction phase • Occupancy phase • Ten year total

  12. 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

  13. 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

  14. ONGOING SF ANNUAL EFFECT INCLUDING: 23 Jobs in Wholesale and Retail Trade 12 Jobs in Local Government 12Health, Education & Social Services

  15. TOTAL SF IMPACT: FIRST TEN YEARS Along with 455 temporary jobs and 95 permanent ones!

  16. BUT NEW HOMES REQUIRE: INFRASTRUCTURE • Fire and police protection • Garbage collection • Parks and recreational opportunities • Roads • Primary and secondary education • Etc…

  17. Required Current Expenses per SF Unit

  18. Required Capital per SF 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 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

  21. 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

  22. Almost done, just a bit more

  23. What does 2 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 12 years?

  24. 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 $16.5 million or 67% of budget

  25. How Large Are Non Property Tax Revenues • 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!

  26. 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

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