1. Presented by: Elliot F. Eisenberg, Ph.D. September 25, 2012 Williston, ND THE LOCAL AREA IMPACT OF HOME BUILDING IN WILLIAMS, COUNTY NORTH DAKOTA

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

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

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

7. The Williston, ND MSA

8. The Williston, ND Multiplier Only Captures Spending that Stays in the MSA 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 700 Economic Impact Analyses Performed Users of the Model Include: Boone County Kentucky Enterprise Foundation 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 Multifamily Average house price: $275,000 $150,000 Average raw lot cost: $6,000 $2,500 Permits/Infrastructure: $2,000 $600 Annual property taxes: $4,098 $2,235

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 534 SF Homes INCLUDING: 483 Jobs in Construction 105 Jobs in Wholesale & Retail Trade 55 Jobs in Business and Professional Services

13. FIRST YEAR IMPACT: SF Ripple INCLUDING: 93 Jobs in Wholesale and Retail Trade 56 Jobs in Health, Education and Social Services 47 Jobs in Eating and Drinking Places

14. ONGOING SF ANNUAL EFFECT INCLUDING: 59 Jobs in Wholesale and Retail Trade 32 Jobs in Health, Education & Social Services 30 Jobs in Eating and Drinking Places

15. Total SF Impact: First Ten Years Local IncomeLocal Taxes $291,682,000$45,365,000 Along with 1,038 temporary jobs And 218 permanent ones!

16. FIRST YEAR IMPACT: MF Construction Every 970 MF Homes INCLUDING: 477 Jobs in Construction 102 Jobs in Wholesale & Retail Trade 53 Jobs in Business and Professional Services

17. FIRST YEAR IMPACT: MF Ripple INCLUDING: 90 Jobs in Wholesale and Retail Trade 54 Jobs in Health, Education & Social Services 45 Jobs in Eating and Drinking Places

18. ONGOING MF ANNUAL EFFECT INCLUDING: 85 Jobs in Wholesale and Retail Trade 48 Jobs in Eating and Drinking Places 39 Jobs in Health, Education & Social Services

19. Total MF Impact: First Ten Years Local IncomeLocal Taxes $405,150,000$51,084,000 Along with 1,011 temporary jobs And 293 permanent ones!

20. Largest Local Private Employers Employer # of FT Jobs Halliburton 1,850 Nabors 1,750 New SF/MF Residential Construction (534 SF/970 MF) 1,383 Key Energy 550 Schlumberger 550 Mercy Hospital 475 School District One 425 Sanjel 375 Wal-Mart 350 Pioneer Drilling 260 Bethel Lutheran 250 City of Williston 180

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

22. Required Current Expenses per SF Unit

23. Required Capital per SF Unit

24. Required Current Expenses per MF Unit

25. Required Capital per MF Unit

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

27. By the end of the 4 th year the debt is fully paid off By the 2 nd year economic impacts offset fiscal costs In the 4 th year, net is $5,079,200 and is $5,108,700 thereafter Yes it does! For every 534 SF and 970 MF units--

28. Over 15 years, every 534 SF and 970 MF units generate a cumulative $141.2 million in revenue for local governments—but only $80.7 million in costs

29. What does 4 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 4 years?

30. Almost done, just a bit more

31. How Large Are Non Property Tax Revenues Single family property taxes are $4,098/unit per year but, yearly revenue is $7,752/unit per year, which is 89% more. Multifamily property taxes are $2,235/unit per year but, yearly revenue is $4,961/unit per year, which is 120% more. Clearly, property taxes are not the whole story!

32. 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 ND state aid is $15 million or 53% of budget

33. Elliot F. Eisenberg, Ph.D. Cell: 202.306.2731 eeisenberg@nahb.org 1201 15 th Street NW Washington, DC 20005-2800 Thank you very much! ANY QUESTIONS?