1. Presented by: David Crowe – Chief Economist October 25, 2013 Lee County, Florida Home Building Impact in 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. 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 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 Spending on Locally Produced Goods and Services Spending on Locally Produced Goods and Services Model of the Local Economy Local Income and Taxes from Phase I Local Income and Taxes from Phase I

8. Phase III OCCUPANCY Spending on Locally Produced Goods and Services 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 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: $326,040 $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 1 st - Construction phase 2 nd - Ripple effect from construction phase 3 rd - 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 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 42% from real estate tax

19. ONGOING Multifamily ANNUAL EFFECT 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 37% from real estate tax

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

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? The benefits of construction & The costs of construction Now that we know:

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

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

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. David Crowe The Lee County Impact of Home Building