USING SIZE AS A SURROGATE FOR PERSON PER UNIT TO DETERMINE IMPACT FEES AN ALTERNATIVE VIEW: PERSONS ARE MOST ACCURATELY DETERMINED USING TYPE, BEDROOM, AND PRICE OF UNIT Prepared By: ROBERT W. BURCHELL, Ph.D. WILLIAM DOLPHIN, MA Prepared For: NATIONAL IMPACT FEE ROUND TABLE (NIFR) NATIONAL CONFERENCE ARLINGTON, VIRGINIA 5 OCTOBER 2006

USE OF DEMOGRAPHIC MULTIPLIERS (I) Demographic multipliers are used nationally in fiscal impact analyses They typically have been presorted by type and size (# of bedrooms) of unit New information adds price or rent of unit as an additional variable

USE OF DEMOGRAPHIC MULTIPLIERS (II) Multipliers are available by state on the Fannie Mae Foundation Web site By price or rent of unit, both HHS and SAC multipliers get smaller with increasing price or rent, holding constant type and size of unit This finding applies to all types of housing units—even affordable units

BANDING DEMOGRAPHICS BY PROPERTY VALUE (I) Single-Family (Value) (4 BR) HHS 67 th Percentile or above3.35 Average rd Percentile or below3.77 Garden Apartment (Rent) (2 BR)HHS 69 th Percentile or above2.10 Average rd Percentile or below2.25 Source: 2000 PUMS Conclusion: Demographics decrease with increasing value/rent.

SCALE OF UNIT AS A SURROGATE FOR IMPACT FEES (I) Size of unit is being introduced as a determinant for the level of impact fees Smaller units would pay less; larger units would pay more Size of unit is used as a surrogate for impact because it has been found that, generally, fewer people live in smaller units

SCALE OF UNIT AS A SURROGATE FOR IMPACT FEES (II) While size is a determinant of scale, better measures of scale are available These better measures have been used in FIA for years Better measures are unit type and # of bedrooms—possibly adding price

SCALE OF UNIT AS A SURROGATE FOR IMPACT FEES (III) Why is this new procedure better? Larger sample in ACS versus AHS (30:1) The procedure yields recognizable estimates of the number of people in a unit The procedure has been used in FIA for decades

MULTIPLIERS BY TYPE OF UNIT (I) Single-family Detached (Results of AHS versus results of ACS) Small single-family unit (2 BR - 2,250 ft. 2 ) HHS—AHS (2,250 ft. 2 ) overstates ACS (2 BR) by 50% SAC—AHS overstates ACS by 275% Large single-family unit (5 BR - 4,000 ft. 2 ) HHS—AHS (4,000 ft. 2 ) understates ACS (5 BR) by 10% SAC—AHS understates ACS by 20%

Single-Family Detached: AHS versus ACS Type/Size of Unit American Housing Survey (AHS) American Community Survey (ACS) AHS (-) ACS AHS Under-/ Over- Percentage SF Det. 2 Br. (Middle Case) (2,250 ft. 2 ) HH Size % SAC % SF Det. 5 Br. (Middle Case) (4,000 ft. 2 ) HH Size % SAC %

MULTIPLIERS BY TYPE OF UNIT (II) Townhouse Units (Results of AHS versus results of ACS) Small townhouse unit (2 BR - 2,000 ft. 2 ) HHS—AHS (2,000 ft. 2 ) overstates ACS (2 BR) by 90% SAC—AHS overstates ACS by 700% Large townhouse unit (4 BR - 3,000 ft. 2 ) HHS—AHS (3,000 ft. 2 ) overstates ACS (3 BR) by 20% SAC—AHS overstates ACS by 60%

Townhouse Units: AHS versus ACS Type/Size of Unit American Housing Survey (AHS) American Community Survey (ACS) AHS (-) ACS AHS Under-/ Over- Percentage Townhouse 2 Br. (Middle Case) (2,000 ft. 2 ) HH Size % SAC % Townhouse 4 Br. (High Case) (3,000 ft. 2 ) HH Size % SAC %

MULTIPLIERS BY TYPE OF UNIT (III) Multifamily Rental Units (Results of AHS versus results of ACS) Small multifamily rental unit (1 BR ft. 2 ) HHS—AHS (800 ft. 2 ) overstates ACS (1 BR) by 30% SAC—AHS overstates ACS by 300% Large multifamily rental unit (3 BR - 1,600 ft. 2 ) HHS—AHS (1,600 ft. 2 ) understates ACS (3 BR) by 15% SAC—AHS understates ACS by 50%

Multifamily Rental Units: AHS versus ACS Type/Size of Unit American Housing Survey (AHS) American Community Survey (ACS) AHS (-) ACS AHS Under-/ Over- Percentage Multifamily Rental 1 Br. (Middle Case) (800 ft. 2 ) HH Size % SAC % Multifamily Rental 3 Br. (Middle Case) (1,600 ft. 2 ) HH Size % SAC %

MULTIPLIERS BY TYPE OF UNIT (IV) Multifamily Ownership Units (Results of AHS versus results of ACS) Small multifamily ownership unit (1 BR ft. 2 ) HHS—AHS (500 ft 2 ) overstates ACS (1 BR) by 35% SAC—AHS overstates ACS by 500% Large multifamily ownership unit (2 BR - 1,800 ft. 2 ) HHS—AHS (1,800 ft. 2 ) overstates ACS (2 BR) by 70% SAC—AHS overstates ACS by 750%

Multifamily Ownership Units: AHS versus ACS Type/Size of Unit American Housing Survey (AHS) American Community Survey (ACS) AHS (-) ACS AHS Under-/ Over- Percentage Multifamily Owner 1 Br. (Middle Case) (500 ft. 2 ) HH Size % SAC % Multifamily Owner 2 Br. (Middle Case) (1,800 ft. 2 ) HH Size % SAC %

MULTIPLIERS BY TYPE OF UNIT (V) Mobile Home Units (Results of AHS versus results of ACS) Small mobile home unit (1 BR ft. 2 ) HHS—AHS (500 ft 2 ) overstates ACS (1 BR) by 20% SAC—AHS overstates ACS by 200% Large mobile home unit (3 BR - 1,800 ft. 2 ) HHS—AHS (1,800 ft. 2 ) and ACS (3 BR) are virtually the same SAC—AHS understates ACS by 15%

Mobile Home Units: AHS versus ACS Type/Size of Unit American Housing Survey (AHS) American Community Survey (ACS) AHS (-) ACS AHS Under-/ Over- Percentage Mobile 1Br. (Middle Case) (500 ft. 2 ) HH Size % SAC % Mobile 3Br. (Middle Case) (1,800 ft. 2 ) HH Size % SAC %

CONCLUSIONS BEDROOM versus SIZE (I) Charging for impact fees by scale of unit makes sense Rational nexus means you have more people to cause more impacts by size This assumption ignores facts on occupancy characteristics that have been known in FIA for years

CONCLUSIONS BEDROOM versus SIZE (II) What are these facts? Type and bedroom are more important indicators than size Within type and bedroom categories number of occupants decreases with value of unit The ACS is 30 times more a robust survey than the AHS The ACS has the PUMS, which allows customized multipliers for smaller areas

CONCLUSIONS BEDROOM versus SIZE (III) Where do we go from here? Recognize that scale is important in impact fees Understand that rational nexus requires best measures of occupancy characteristics of units Consider type, bedroom, and value as a replacement for size This is a procedure used in fiscal impact analysis for decades