IMPACT OF NEW RESIDENTIAL CONSTRUCTION ON HENRY COUNTY’s LOCAL ECONOMY

By Steve Cash, Executive Director
Henry Council for Quality Growth

How often do you hear someone say, “builders and developers are here to rape our land and dirty our waters; they are only out for themselves; they make the big money and never contribute back to our community”? I’m sure you have heard many attacks like this on the growth industry.

I would certainly venture to say that our industry does far more for our economy than all other industries in our county. Come to think of it, it is my opinion that the growth industry does far more for our community in charitable giving than any other county industry. Yes, I like to call them civic heroes. I shudder to think where many of our charitable organizations would be today without the generous contributions made, whether through financial resources, time, or labor. Many such civic heroes are members of our Growth Council. I certainly appreciate your unselfish contributions toward the enhancement of every Henry County citizen’s quality of life. I will save the rest of this discussion for another time.

Chris Burke, Government Affairs Director for the Greater Atlanta Home Builders Association, wrote an article about the financial impact of new housing on the Atlanta economy. I took it a step further and calculated how new housing impacts Henry County’s economy based on statistical information provided by the National Association of Home Builders.

Burke states, “The home building industry generates substantial local economic activity, including new income and jobs for residents and additional revenue for local governments.” Let’s not forget that new homes attract amenities such as restaurants, malls, movie theatres, bowling alleys, and the list goes on and on. Guess what? These types of businesses do not even think about locating in an area until the residential roof tops are in place. Previous resident surveys overwhelmingly cited the need for theatres, bowling alleys, malls and nice restaurants on their priority wish lists. You can’t have one without the other.

What exactly does the construction of one new home add to the Henry County economy? Burke explains, “At face value, the construction of a new home contributes a set amount of property taxes to the local tax base and helps fund infrastructure such as water and sewer. But it also generates substantial revenue in tax dollars because as more people move into the area they will likely patronize the business establishments in the area.” Remember the times when we all said that we were tired of going to Clayton County for entertainment, fine dining and shopping?

According to the National Association of Home Builders, the construction of 1000 single family homes in the Atlanta area:
· Generates 2,448 jobs in construction and construction-related industries
· Generates $79.4 million in wages
· Contributes more than $42.5 million in federal, state, and local tax revenue and fees

In 2005, Henry County builders purchased 2,954 new home permits. That’s compared to the above example. Let’s do the math:
· 2,954 new homes x 2448 jobs = 7,232 Henry County jobs. That over 7,000 NEW JOBS in Henry County last year.
· 2,954 new homes x $79.4 million = $234,547,500 (that’s millions!) in wages paid.
· 2,954 new homes x $42.5 million = $125,545,500 (that’s millions again!) in federal, state, and local tax revenue and fees.

Let’s not forget the $4,435,827 in impact fees for the purchase of fire trucks, the acquisition of land for parks, supplemental police services, libraries, etc. Then you add the $8,000,000 in impact fees the county collected for water and sewer in 2005.

David Ellis, Executive Vice President for the Greater Atlanta Homes Builders Association, stated in a recent Atlanta Business Chronicle article that there are warning signs that say quality growth may be in jeopardy. Ellis further states, “while our state and local governments are working hard in partnership with private industry to attract new jobs to the Atlanta area, many of these same local governments are working at odds with the vital link between attracting and retaining economic vitality - the housing industry. It’s a recipe for disaster.”

Many local governments have or are vigorously working toward enacting various impact fees for capitol improvements, transportation and education. Government sees these fees as a way to offset infrastructure costs without raising local taxes. Your larger builders will pass these fees on to the buyer while the small local builder will have to absorb the fee into his or her already dwindling profit margin. Ellis explains that impact fees are probably good in theory, but the facts do not always play out that way. Impact fees in metro Atlanta (including Henry County) have not eliminated property tax increases, stopped special local option sales taxes, or encouraged affordable housing. More fees mean costlier homes, which impact the ability of first time home buyers to purchase their dream homes.

Your Growth Council committees and staff will continue our mission to educate state, county and city leaders on exactly how important it is to encourage sustained residential growth in our communities for economic vitality and quality of life enhancements for its citizens.

In recent years and months, state and local governments have lambasted local businesses, large and small, with new regulations, costly code changes, mounting impact fees, extreme enforcement, supplementing transportation and intersection improvements, and costly red tape. Sometimes I can’t help but wonder if our elected leaders and government bureaucracy really know what the growth industry really means to our beloved Henry County. Baby with the bath water????

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(Steve Cash is executive director of the Henry Council for Quality Growth, a 300-member, privately supported not-for-profit business association with the goal of promoting and encouraging quality growth in Henry County, Ga. A former Henry County State Representative, he has served as chairman of the Henry County Chamber of Commerce as well as the chairman of Leadership Henry. He was appointed by Governor Perdue in 2005 to the state Contractor’s Licensing Board and has been a residential builder/developer for 23 years. Steve resides in Stockbridge with his wife Marsha and their son Charlie. His family is actively involved in Eagle’s Landing First Baptist Church. You can contact Steve by email at info@henrycouncilforqualitygrowth.com, and his organization’s website address is www.henrycouncilforqualitygrowth.com)

Add comment June 29th, 2006