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. Phase I CONSTRUCTION Value of Construction +
Services Provided at Closing
Permit / Hook-up / Impact Fees
Model of the Local Economy
Local Income and Taxes

7. Phase II RIPPLE from Phase I Spending on Locally Produced
Goods and Services
Model of the Local Economy
Local Income and Taxes
from Phase I

8. Phase III OCCUPANCY Income of Occupant in New Housing Unit +
Spending on Locally Produced
Goods and Services
Model of the Local Economy
Local Income and Taxes
Income of Occupant in
New Housing Unit +
Increased Property Taxes

9. Cape Coral – Fort Myers MSA Lee County, Florida

10. Assumptions of the Model
Inputs To Model Single-family Multifamily
Average house price: $326, $195,164
Average raw lot cost: $11, $9,391
Permits/Infrastructure: $2, $1,446
Annual property taxes: $4, $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. Does new construction pay for itself?
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
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
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