Homes DO Pay for Themselves!

When considering the impact of new homes on a community, everyone must consider fully both sides of the equation if they are to be intellectually honest. Homes produce not only real property taxes but also much more, while the costs to service new home communities is often far overstated.

To accurately answer the question of whether homes pay for themselves, towns and cities must consider all the taxes and fees paid by or from new homes, including from the new economic activity and job creation resulting from new homes, plus the true costs to service those homes.

Everyone is, of course, entitled to their own opinions about housing, and where, what type and how much of it we need, but nobody is entitled to their own facts about housing's positive impacts. In particular, let facts dissolve the myth that homes produce too many public school children. The links below to articles and research reports reveal a factual truth: New Housing More Than Pays for Itself and Are Economic Engines for Our Communities, the State and the Nation!

Average Number of School Age Children per Home - (2-8-17) confirms research done by Rutgers University (see below)

The Connecticut Economic Digest - State of CT extensively references the housing impact study that NAHB's Elliot Eisenberg did for us in the spring 2012; see lead housing article on pg 1 (7-20-12)

NAHB's (then) Senior Economist, Elliot Eisenberg, presented Housing's Impact on CT's Economy to CT's legislature (1 pg summary); Presentation Slides; backup REPORT; COSTS (March 8, 2012)

See how the Cost of Community Services ("COCS") "studies," usually cited for the proposition that homes are economic losers for local governments, are economically flawed.

Residential Demographic Multipliers from Rutgers University - New Home Occupant Estimates for Connecticut - See how many public school children really come from new housing. Rutgers University, Center for Urban Policy Research, demonstrates that one or two bedroom apartments bring a community small numbers of school age children. Even three, four and five bedroom homes bring much fewer public school children to a community than most people assume.

University of Massachusetts, Donahue Institute - Fiscal Impact of Mixed-Income Housing on MA Communities - This study demonstrates that school costs in Massachusetts rose independently of school enrollment. Increased costs on local school systems were usually due to rises in health care costs and pensions expenses.

Deconstructing the Myths: Housing Development Versus School Costs - Federal Reserve Bank of Boston confirms what numerous studies prove: Housing Pays Its Own Way!

Massachusetts Institute of Technology, Center for Real Estate, Effects of Multi-Family Housing on Single Family Home Values - This MIT study found that mixed-income rental developments did not negatively impact the sale prices of houses in the neighborhoods surrounding the rental developments.

From the Partnership for Strong Communities - see Housing and Municipal Budgets: Figures, Facts and Phenomena

NAHB Study Quantifies Contributions Home Building & Related Activities Make to the Economy (Oct 2008). Showing the national averages for jobs and tax revenues produced by housing at all government levels, see CT specific and more recent data above.  In 2008, NAHB estimated that: Construction of 1,000 new single-family homes creates 3,049 jobs and generates more than $89 million in tax and other revenues for federal, state and local governments; Construction of 1,000 new multifamily rental units creates 1,155 jobs and generates more than $33 million in tax and other government revenues; $100 million worth of residential remodeling activity creates 1,109 jobs and generates more than $30 million in tax and other government revenues.

From the Executive Summary: "Home building generates substantial local economic activity, including new income and jobs for residents, and additional revenue for local governments. The National Association of Home Builders has developed a model to estimate the economic benefits. The model captures the effect of the construction activity itself, the ripple impact that occurs when income earned from construction activity is spent and recycles in the local economy, and the ongoing impact that results from new homes becoming occupied by residents who pay taxes and buy locally produced goods and services. In order to fully appreciate the positive impact residential construction has on a community, it’s important to include the ripple effects and the ongoing benefits. Since the NAHB model was initially developed in 1996, it has been successfully applied to construction in over 500 projects, local jurisdictions, metropolitan areas, non-metropolitan counties, and states across the country.

This report presents estimates of the local impacts of building 100 single family units, 100 rental apartments, and $10 million worth of spending on residential remodeling (equivalent to 100 remodeling jobs at $100,000 each) in a typical U.S. metropolitan area, with the key inputs (such as new home prices, raw land values, and construction related fees) set equal to national averages."

This NAHB report documents that nationally, the one-year local impacts of building 100 SF homes in a typical metro area include $21.1 million in local income, $2.2 million in taxes and other revenue for local gov't, and 324 jobs. The additional, annually recurring impacts of building 100 SF homes equal $3.1 million in local income, $743,000 in taxes and other revenue for local gov't, and 53 local jobs. Building 100 rental apartments produce income taxes and jobs in these amounts: In the first year: $7.9 million in local income, $827,000 in taxes and other revenues for local gov't, and 122 local jobs; annually recurring amounts: $2.3 million in local income, $395,000 in taxes and other revenue, and 32 local jobs. Also, the impacts of $10 million spent on remodeling in a typical metro area include $6.9 million in local income, $577,000 in taxes and other revenue for local government, and 78 local jobs. Since taxes and fees are generally higher in CT, all these amounts would typically be higher in CT.

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