City of Tega Cay, South Carolina

Transcription

1 City of Tega Cay, South Carolina Regular City Council Meeting Agenda Tega Cay Glennon Center - Lower Level Molokai Drive, Tega Cay, SC 6:30 P.M. Call to Order, Pledge of Allegiance and Moment of Silence 1. Presentation 1.a. The Contribution Of Housing Markets On The Local Economy Documents: VON_NESSEN_CONSTRUCTION_APR2016.PDF Council Comments Adjournment

2 Tega Cay/Ft. Mill Joint Council Workshop April 5, 2016

3 Joseph Von Nessen, Ph.D. Research Economist April 5, 2016

4 Outline Housing Markets and their Relationship to Economic Growth South Carolina s Housing Market Growth in the Current Economic Expansion Local Economic Trends Future Sources of Growth

5 Housing Markets Historically Contribute in Excess of 15% to GDP

6 (1) Construction: Bricks and Sticks (2) Housing Related Services

7 Housing s Share of U.S. GDP 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 17.9% 18.2% 17.4% 17.7% 17.6% 18.6% 15.5% 15.3% 15.3%

8 The Great Recession Led to (1) Major Declines in Total Employment (2) Significant House Price Depreciation (3) A Reduction in Household Formations (4) Lower Household Income / Disposable Income

9 U.S. Employment Growth 3.0% 2.0% 1.0% 1.3% 0.3% 1.1% 1.9% 1.5% 1.7% 2.1% 2.0% 0.0% -1.0% -2.0% -3.0% -2.0% -4.0% -5.0% -4.2%

10 FHFA House Price Index: South Carolina q110 q210 q310 q410 q111 q211 q311 q411 q112 q212 q312 q412 q113 q213 q313 q413 q114 q214 q314 q414 q115 q215 q315 q % 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0%

11 U.S. Household Formation Growth 2.5% 2.0% 1.5% 2.1% 1.5% 1.7% 1.0% 0.5% 0.6% 0.4% 0.7% 0.4% 0.6% 0.8% 0.7% 0.7% 0.0%

12 S.C. Per Capita Personal Income % 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0%

13 6 th Year of Expansion! Best Yet for S.C.

14 Our expansion is strong, broad-based, & statewide

15 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% -6.0% S.C. Annual Employment Growth 1.5% 2.0% 2.3% 2.6% 2.7% 2.1% 1.7% 2.0% 1.2% 0.2% -0.2% -1.1% -1.0% -5.8% Source: Bureau of Labor Statistics, Current Employment Statistics, NSA Annual Averages

16 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 15,000 S.C. Jobs Added Per Month 10,000 5, ,000-10,000 Source: Bureau of Labor Statistics, Current Employment Statistics, SA Jobs added per month 2010: 2, : 1, : 3, : 3, : 4, : 4,600

17 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct Leading Economic Indices October Floods SC US Source: Federal Reserve Bank of Philadelphia

18 S.C. Employment Growth: % 3.3% Fairfield 12.2 % 2.6% 1.0% 2.6% 3.4% Source: State and Area Employment, Hours, and Earnings, NSA Annual Averages 3.6% Avg. Growth: +2.7%

19 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2014 vs Industry Growth Statewide 2.6% 4.8% 2.5% 3.0% 1.5% 0.8% 3.2% 3.4% 3.8% 2.4% 1.3% Source: Bureau of Labor Statistics, Current Employment Statistics, NSA Annual Averages

20 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% Closer Look: Manufacturing 6.6% 6.9% Primary Metal Manu Computer and Electronic 1.9% Transportation 0.5% Food, Bev, Tobacco Textile $45,838 Non-Durable Goods 0.5% Petroleum & Coal 0.0% Plastics & Rubber -4.0% Durable Goods -6.0% $66, % -8.0% Source: Bureau of Labor Statistics, Current Employment Statistics, NSA & QCEW

21 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Closer Look: Professional and Business Services 36.6% 28.0% $64, % 67.7% Prof., Sci., & Tech. Adm. Support & Wst. Mgmt Source: Bureau of Labor Statistics, Current Employment Statistics, NSA & QCEW $32,214

22 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Job Openings Rate Upward Wage Pressure Source: US Job Openings and Labor Turnover Survey, SA

23 South Carolina Labor Force Growth 3.0% 2.8% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 0.1% 1.5% 0.6% 0.9% 0.3% 0.0% 0.9% -0.5% -1.0% -0.6% Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Source: Bureau of Labor Statistics, Local Area Unemployment Statistics, SA

24 S.C. Employment Growth: Construction 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% 2014/ / /2015 Construction of Bldgs Hvy&Cvl. Eng. Const Spec. Trd. Cont. Source: Bureau of Labor Statistics, Current Employment Statistics, NSA

25 q110 q210 q310 q410 q111 FHFA House Price Index q211 q311 q411 q112 q212 q312 q412 q113 q213 q313 q413 q114 q214 q314 q414 q115 q215 q315 q % 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% Source: U.S. Federal Housing Finance Agency Charleston Columbia Greenville Hilton Head

26 Local Trends

27 The Pillars of Growth Geography (natural resources and location) Industry (produces employment) Workforce (to fill industry demand for labor) Housing (to house a local workforce) People attract business and housing attracts people. - Nevada Rural Housing Authority

28 Tega Cay Population 10,000 8,000 9,120 6,000 4,000 2,000 3, Population has grown 4.7% per year between 1990 and 2014 tripling the number of residents. Source: US Census Bureau, Historical Population Estimates

29 Cause and Effect Population Growth (Relatively) Fixed Town Size House Price Appreciation Proximity to Charlotte 3.2 square miles employment Proximity to Lake Wylie and other local amenities Recognized outstanding school system

30 House Price Appreciation Tega Cay has one of the highest median home prices in the state. $400,000 $351,500 $350,000 $290,100 $300,000 83% higher $250,000 $200,000 $158,700 $150,000 $100,000 $50,000 $0 Tega Cay York County Mt. Pleasant Charleston County Source: US Census Bureau, Quick Facts 48% higher $236,900 $137,600 South Carolina

31 Ability to Purchase Rule of thumb: Households generally have the ability to purchase a house that is approximately 2.5 to 3 times their annual income. Why? (1) Financeable (2) Sustainable

32 Cross Market Comparisons Market (County) Median Home Price Purchasing Ratio Charleston $236, Mecklenburg $181, Greenville $154, Richland $148, Dorchester $164, York $158, Berkeley $151, Spartanburg $123, Lexington $139, Source: American Community Survey

33 Characteristics of Tega Cay More Income: Median household income is 2.5 times higher than the state average. More Expensive: Median house price is about 2.1 times higher than the state average. More Educated: Over 60% of the working age population has at least a bachelor s degree compared to about 25% statewide. More Homeowners: Percentage of housing units owner-occupied is over 92% compared to 68.6% across the state.

34 Upside Potential and Downside Risk of Development Upside Potential Attracting local industry Building a more diverse, economically stable community Keeping housing affordable Ability for residents to live where they work Downside Risk Local area dependent on one industry/region Less stable housing prices Need to import workers is this sustainable?

35 Future Sources of Growth

36 Economic Impact Analysis Initial change in economic activity (e.g., new business formation) Spending activity Economic activity (GDP), Job creation, Income Creation

37 Economic Impact Analysis Direct Effects Spending resulting from initial economic activity Indirect Effects Spending resulting from inter-industry supply chain Induced Effects Spending resulting from changes in household income

38 Economic Impact Analysis Ex: New community development Direct effect: Increase in construction activity Indirect effect: Increase in construction-related suppliers Induced effect: Increase in business demand resulting from worker spending through direct or indirectly affected business activity (i.e., retail and other local services)

39 Economic Impact Analysis Direct Effects Supply Chain Multiplier Household Spending Multiplier

40 Housing Industry Multiplier The employment multiplier associated with the construction industry in South Carolina is 1.8. This means that for every 10 jobs created in the construction industry, another 8 jobs are created elsewhere in the local economy

41 Joseph Von Nessen, Ph.D. Research Economist April 5, 2016