Economic Impact of Home Building Honolulu County Hawaii
Economic Impact of Home Building Honolulu County, Hawaii BIA - Hawaii November 15, 2016 Robert Dietz, Ph. D. NAHB Chief Economist
What is the Economic Impact of Home Building • NAHB impact developed in 1996 • More than 800 studies, including for universities and affordable housing groups • 2002: adapted for Low-Income Housing Tax Credit rental developments • 2005: adapted for remodeling analysis
What is the Economic Impact of Home Building? • Study of Honolulu County, Hawaii • Urban Honolulu, MSA consisting of a single county (Honolulu) in Hawaii • 100 single-family homes
Local Economic Impact of Single-family Home Building 1 st - Construction phase Jobs, Materials, Fees, Taxes 2 nd - Ripple effect from construction phase Wages spent in local economy 3 rd - Occupancy phase Earnings spent in the local economy
Assumptions of the Model Inputs To Model Single-family Average house price: $522, 600 Average raw lot cost: $100, 308 Permits/Infrastructure: $12, 393 Annual property taxes: $1, 549
Phase I CONSTRUCTION Value of Construction + Services Provided at Closing + Permit / Hook-up / Impact Fees Model of the Local Economy Local Income, Taxes, & Jobs Supported
FIRST YEAR IMPACT: Single-family Construction – 100 Homes INCLUDING: $1. 24 M permit and impact fees 172 jobs in Construction 42 jobs in Wholesale and Retail Trade 20 jobs in Business and Professional Services * One job represents enough work to keep one worker employed full-time for a year.
Phase II RIPPLE Local Income and Taxes from Phase I Spending on Locally Produced Goods and Services Model of the Local Economy Local Income and Taxes
FIRST YEAR IMPACT: Single-Family Ripple INCLUDING: 38 38 34 21 jobs in in Wholesale and Retail Trade Local Government Health, Education and Social Services Eating and Drinking Places
Phase III OCCUPANCY Income of Occupant in New Housing Unit + Increased Property Taxes Spending on Locally Produced Goods and Services Model of the Local Economy Local Income and Taxes
ONGOING Single-Family ANNUAL EFFECT INCLUDING: $119, 800 property tax 18 jobs in Wholesale and Retail Trade 12 jobs in Health, Education and Social Services 10 jobs in Business & Professional Services
NEW HOMES REQUIRE • Fire and police protection • Garbage collection • Parks and recreational opportunities • Roads • Correctional facilities • Primary and secondary education • Etc. Data: Local and Federal Government
Required Current Expenses
Required Capital per Unit
Net Economic Impact Estimates 100 Single-Family Homes (463 Phase I and II jobs, 80 Phase III jobs) $14. 6 million in revenue; $6. 1 million in costs $8. 5 million in net revenue
Thank you. Questions? eyeonhousing. org housingeconomics. com @dietz_econ
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