ECONOMIC IMPACT OF REAL ESTATE DEVELOPMENT IN GUILFORD COUNTY, NC
In 2006, Dr. G. Donald Jud released his study of “the Economic Impact of Real Estate Development in Guilford County” based on 2004 activity (a typical, moderate year.) It looked at economic impact, net of public services costs, during construction and for the first 10 years of occupancy of average single-family, condo/townhouse, apartment, office, retail and industrial projects. A copy of the study can be found on our website at www.trebic.org. Highlights of the study are:
·In Guilford County, real estate development is responsible for:
Ö over 1 billion dollars in economic output annually
Ö the creation of 10,621 jobs, and
Ö nearly $51 million in annual local government income.
Annual additional economic output
Annual local tax revenues
100 SF Homes
260 units Condo/Townhouse
100 unit Apartments
80K SF Office
10K SF Retail
100K SF Industrial
· If a major employer contacted our economic development professionals for a location for a 10,000-job generator, we'd be asking “how much can we give them to get them here?”
· Of the 6 land uses studied, 5 more than cover their cost of local government services: Office, industrial, retail, single-family and townhomes/condos. (This is the same kind of study done for major economic development projects such as Dell, Fed Ex and the Furniture Market, with one exception: Dr. Jud went the extra mile to calculate a NET benefit number, after government services costs, because the question is frequently asked "Does growth pay its way?")
· Apartments did not appear to cover their costs, however, apartments are an important and major component of our affordable housing supply, which we subsidize in many ways at every level of government in the US. Apartments also house highly desirable population groups, such service workers and the 18-34 age group. The Urban Land Institute (ULI) suggests that such higher density development generates savings in environmental impacts and many government service costs that this study could not quantify.
· Rather than growth not paying its way, the reality is that revenues from new real estate development subsidize existing development. 2 examples of this: Mecklenburg County did not raise its property tax for 18 straight years, while expenses rose steadily (for things like payroll, insurance, utilities, etc.) It was new growth that was making up the difference. Cary deliberately instituted measures and fees designed to slow growth in the mid and late 1990s. Around 2003/2004, with the growth rate "successfully" ground to a halt, the town was faced with a tax increase as high as 29% just to keep up with rising costs.
· While there may be incremental "lumps" in government spending to serve growth (such as water plant expansions), over the long haul new growth more than pays for itself.