THE LOCAL IMPACT OF HOME BUILDING IN WINNEBAGO COUNTY, WI. Presented by: Elliot F. Eisenberg, Ph.D. December 8, 2010 Oshkosh, WI

Transcription

1 THE LOCAL IMPACT OF HOME BUILDING IN WINNEBAGO COUNTY, WI Presented by: Elliot F. Eisenberg, Ph.D. December 8, 2010 Oshkosh, WI

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 The model does not say build housing to stimulate the local economy Rather, it is job creation that results in increased demand for housing, but remember that..

4 CONSTRUCTION PHASE INPUTS: VALUE OF CONSTRUCTION SERVICES PROVIDED AT CLOSING PERMIT/HOOK-UP FEES $ $ $ $ $ (Obtained from Local Sources) MODEL OF THE LOCAL ECONOMY OUTPUTS: INCOME FOR LOCAL RESIDENTS & TAX/FEE REVENUE FOR LOCAL GOVERNMENTS

5 RIPPLE PHASE INPUTS: LOCAL INCOME & TAXES FROM PHASE 1 SPENDING ON LOCAL GOODS & SERVICES Consumer Expenditure Survey (U.S. Bureau of Labor Statistics) MODEL OF THE LOCAL ECONOMY OUTPUTS: LOCAL INCOME & TAXES

6 OCCUPANCY PHASE INPUTS: INCOME OF HOUSEHOLD OCCUPYING NEW HOUSING UNIT SPENDING ON LOCAL GOODS & SERVICES PROPERTY TAX PAYMENTS MODEL OF THE LOCAL ECONOMY OUTPUTS: LOCAL INCOME & TAXES

7 Oshkosh-Neenah, WI MSA

8 The Oshkosh-Neenah, WI MSA Multiplier Only Captures Spending that Stays in the Area Includes: Banking, Car Repair, Dry Cleaning, Day Care Services, Dental Services, Electricity, Landscaping, Legal Services, Manicures, Medical Services, Newspaper Delivery, Restaurants and Psychiatric Care. But Not: Auto Manufacturing, Beer Bottling, Mattress Manufacturing, Meat Packing, Movie Production, and Travel Agency Services

9 History of the Model Over 675 Economic 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 University of Florida University of Massachusetts University of Montana West Virginia Housing Development Fund

10 Assumptions of the Model Inputs To Model Single Family Average house price: $203,805 Average raw lot cost: $7,000 Permits/Infrastructure: $1,500 Annual property taxes: $4,052

11 Economic Impact of Single Family Home Building 1 st - Construction phase 2 nd - Ripple effect from construction phase 3 rd - Occupancy phase 4 th - Ten year total

12 FIRST YEAR IMPACT: SF Construction Every 207 SF Homes Local Income Local Taxes Local Jobs $20,529,500 $774, INCLUDING: 198 Jobs in Construction 43 Jobs in Wholesale & Retail Trade 22 Jobs in Business and Professional Services

13 FIRST YEAR IMPACT: SF Ripple Local Income Local Taxes Local Jobs $9,129,600 $881, INCLUDING: 38 Jobs in Wholesale and Retail Trade 23 Jobs in Health, Education & Social Services 19 Jobs in Eating and Drinking Places

14 ONGOING SF ANNUAL EFFECT Local Income Local Taxes Local Jobs $6,060,000 $1,569, INCLUDING: 26 Jobs in Wholesale and Retail Trade 14 Jobs in Health, Education & Social Services 13 Jobs in Eating and Drinking Places

15 Total SF Impact: First Ten Years Local Income Local Taxes $87,229,100 $16,568,000 Along with 422 temporary jobs And 97 permanent ones!

16 Largest Private Local Employers Employer # of FT Jobs Oshkosh Corporation 4,000 Bemis (all Oshkosh locations) 2,521 Aurora Medical Center & Medical Group 1,900 Wal-Mart Stores, Inc. 1,079 Miles Kimball 700 Winnebago Mental Health Institute 677 US Bank 675 Affinity Mercy Medical Center 545 Hoffmaster Group 502 4imprint 424 Clarity Care 326 Wal-Mart Super Center 318 New SF Residential Construction 286

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

18 Required Current Expenses per SF Unit Function Single Family State Aid Education $1,301 67% Police Protection $508 0% Fire Protection $296 0% Corrections $137 0% Streets and Highw ays $121 61% Water Supply $209 0% Sew erage $113 0% Recreation and Culture $333 0% Other General Government $1,335 34% Electric Utilities $316 0% Public Transit $21 55% Total $4,689

19 Required Capital per SF Unit Function Single Family Schools $2,629 Hospitals $75 Other Buildings $3,239 Highw ays and Streets $2,333 Conservation & Dev. $9 Sew er Systems $1,710 Water Supply $2,254 Other Structures $1,427 Equipment $147 Total $13,823

20 Now that we know: The benefits of construction & The costs of construction Does new construction pay for itself?

21 Yes it does! For every 207 SF units-- By the end of the 3 rd year the debt is fully paid off By the 2 nd year economic impacts offset fiscal costs In the 3 rd year, net is $576,700 and is $599,200 thereafter Current Operating Investment Debt at Interest Net Year Expenses Revenue Surplus Start of Year Year End On Debt Income 1 485,300 2,440,100 1,954,800 2,861,400 1,038, ,200-1,038, ,600 1,569, , ,600 48, , ,600 1,569, , , , ,600 1,569, , , ,600 1,569, , , ,600 1,569, , , ,600 1,569, , , ,600 1,569, , , ,600 1,569, , , ,600 1,569, , ,200

22 Over 15 years, every 207 SF units generate a cumulative $24.4 million in revenue for local governments but only $17.2 million in costs

23 What does 3 years mean? That is, should it be done faster, or is it O.K.? 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 3 years?

24 Almost done, just a bit more

25 How Large Are Non Property Tax Revenues Single family property taxes are $4,052/unit per year but, yearly revenue is $7,583/unit per year, which is 87% more. Clearly, property taxes are not the whole story!

26 A Closer Look at Primary and Secondary Education 12.6% attend private schools nationally 1.7% are Home schooled nationally 0.4 school age children/mf unit nationally 0.6 school age children/sf unit nationally WI school aid is $155 million or 67% of budget

27 ANY QUESTIONS? Elliot F. Eisenberg, Ph.D. Office: Cell: Fax: th Street NW Washington, DC Thank you very much!