Healthy housing market supports industry

Published 12:16 pm Saturday, July 2, 2016

To the Editor:
Publisher Tony Clark, in an editorial in the June 25 Tidewater News, argues for more economic and less residential development based on the costs of serving additional households with utilities, schools and emergency services. As a homebuilder, I have been battling this misperception for decades. Let me try again.

According to The Center for Economic Development at the University of Massachusetts, “home building generates substantial local economic activity, including income, jobs and revenue for state and local governments. These far exceed the school costs-to-property-tax ratios.” The Illinois Housing Development Authority determined that “the Authority’s new construction activity in single and multifamily housing … resulted in the creation of 4,256 full-time jobs in construction and construction-related industries.”

Finally, The Shimburg Center for Affordable Housing at the University of Florida established that “the real estate taxes paid year after year are the most obvious long-term economic benefit to the community. Probably the second most obvious long-term economic benefit is the purchases made by the family occupying the completed home.”

It is people, not buildings, that generate real income in a community. When people start new businesses, buy new cars, move up from apartments to houses, they generate new opportunity and revenue. Indeed, consider tap fees. In the City of Franklin, they are $3,500 for water connections and $4,500 for sewage connections or $8,000 total. If you build 100 housing units, that’s $800,000 at no cost to the locality because the developer installs the systems.

Taken further, the estimated first year impact of constructing those 100 single-family homes is $28.7 million in local income, $3.6 million in taxes and other revenue for local governments, and 394 local jobs. In addition, the wages and profits for local area residents earned during the construction period are spent on other locally produced goods and services. This generates additional income for local residents, which is spent on still more locally produced goods and services and so on. This continuing recycling of income back into the community is usually called a multiplier or ripple effect. Meanwhile, commercial real estate’s value is based on the market. When it’s occupiedm it’s great. When it’s not, it’s an eyesore. We have too much of the latter in our area.

We must always remember that housing supports industry — housing is where industry sleeps at night.

We know that vibrant communities around the state, urban and rural, typically share these common traits: citizens are engaged; neighborhoods are safe and schools are thriving. And there is one constant at the heart of every vibrant community — a healthy housing market.


Bobby Tyler