Group Title: Affordable housing issues
Title: Affordable housing issues ; vol. 18 no. 2
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 Material Information
Title: Affordable housing issues ; vol. 18 no. 2
Series Title: Affordable housing issues
Physical Description: Serial
Language: English
Creator: Shimberg Center for Affordable Housing
Publisher: Shimberg Center for Affordable Housing
Place of Publication: Gainesville, Fla.
Publication Date: February 2008
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Bibliographic ID: UF00087009
Volume ID: VID00048
Source Institution: University of Florida
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HOUSE ING


AFFO DABL


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M.E. Rinker, Sr., School of Building Construction College of Design, Construction & Planning PO Box 115703,
University of Florida, Gainesville, FL 32611-5703 TEL: (352) 273-1192 SUNCOM: 622-7697 FAX: (352) 392-4364


Volume XIV, Number 2


February 2008


The purpose of this newsletter is to describe the impact on Florida's economy of residential
construction and related real estate transactions. The most recent year of available data
is 2006. As a result, the beginning indications of the down turn in the residential market
were just beginning to be seen. As may be seen, the residential real estate and construction
industries combine to represent a significant portion of Florida's total economic activity. Al-
though this newsletter focuses only on the state-level information, the full report titled The
State of Florida's Housing, 2007 examines economic activity at the county and metropolitan
statistical area (MSA) level and will be available on the Internet in mid-March at www.
flhousingdata.shimberg.ufl.edu.
Douglas White, Florida Housing Data Clearinghouse, Shimberg Center, University of Florida


Building Permit activity, obtained from the
University of Florida's Bureau of Economic and
Business Research, is analyzed to derive the value
of new construction for the state. Additions to the
tax base and revenues generated are also determined.
According to the building permit data, there were
203,238 new units built in Florida in 2006. Of these
new units, 146,236 were single-family units and
the remaining 57,002 were multi-family units. The
single-family units had a value of $27.9 billion and
the multi-family units had a value of $7.8 billion for
total of $35.7 billion in new residential construction.
Table 1 shows the distribution of this new
construction by MSA and non-metropolitan regions.


IMPLAN, an economic impact modeling software
program, was used to estimate the impacts generated
by residential construction and real estate related
transactions. When estimating the impacts, the
residential construction numbers were divided
a into single-family construction and multi-family
construction to more accurately model the impact,
but only the combined impact is presented in this
report. Also note that in order to better model
WM








the impacts of construction, Monroe County has
been combined with the Miami-Fort Lauderdale-
Pompano Beach MSA and was been removed
from the Southern Non-metropolitan region. Also,
Putnam County was combined with the Gainesville
MSA and therefore removed from the Central Non-
metropolitan region.
Three types of impacts are estimated for non-
residential construction and real-estate-related
transactions: direct effects, indirect effects, and
induced effects. Direct effects are the changes in the
industries to which a final demand change was made.
Indirect effects are the changes made in inter-industry
purchases as they respond to the new demands of the
directly affected industries. Induced effects typically
reflect changes in spending from households as
income increases or decreases due to the changes in
production.






Output multipliers predict how much increased
economic activity in other industries is caused by
every additional dollar increase in one specified
industry. Here the direct impacts are the new
residential construction. IMPLAN models these
direct effects and generates indirect and induced
effects to arrive at a total impact on the MSA
economy. These effects are then summed to get an
estimate of the total effect on the state. The total
effect at the state level was that the $35.7 billion
in new residential construction generated a total of
$59.1 billion in economic activity.






The $35.7 billion in new residential construction
generates a total of $22.2 billion in earnings. Of
this $22.2 billion, the workers building the new
residential construction directly earn $13.59 billion.
There are also $4.28 billion in indirect earnings and
$4.3 billion of induced earnings. An example of an
indirect earner would be someone involved in mining
the raw materials used to make the concrete that is
be used in the new construction, and an example of


an induced earner would be a waiter who is hired due
to increase spending by the newly hired construction
workers.






The direct impact on employment is the worker hired
to build the new construction or complete the real
estate transactions. The indirect impact would be a
new miner hired by a concrete manufacturer due to the
increase in construction, and the previously mentioned
waiter would be an example of an induced effect.
Residential construction's impact on employment is
approximately 587,000 jobs.

Therefore it is estimated that the economic impact
from new residential construction is approximately
$59.1 billion annually. Furthermore, new residential
construction provides nearly 587,000 jobs with annual
earnings of nearly $22.2 billion.






Florida's 67 counties include 39 urban counties and
the 28 rural counties. The urban counties can also
be divided into those that are a part of the four major
metropolitan areas and sixteen other metropolitan
areas. Almost 94% of the single-family homes and
98% of condominiums are located in these urban
counties. The rural counties can be further divided
into coastal and non-coastal counties. Besides
housing differences in the urban and rural counties,
there are often also a number of differences in housing
characteristics between coastal and non-coastal
counties. While the metropolitan areas contain a
majority of the housing stock, the most expensive
housing is often found in non-metropolitan areas. The
most expensive, and also least affordable, housing
stock is often found in coastal counties, which also
happen to be some of the non-metropolitan areas.
This fact highlights the fact that in Florida, often has
there is a distinct difference between metropolitan
areas and non-metropolitan areas as well as between
coastal and non-coastal counties.











Total
Construction


Cape Coral-Fort Myers, FL MSA $3,732,956
Deltona-Daytona Beach- $808,785
Ormond Beach, FL MSA
Fort Walton Beach-Crestview- $283,616
Destin, FL MSA
Gainesville, FL MSA $265,705
Plus Putnam County
Jacksonville, FL MSA $2,681,770
Lakeland, FL MSA $1,116,655
Miami-Fort Lauderdale- $6,422,165
Pompano Beach, FL MSA Plus Monroe County
Naples-Marco Island, FL MSA $1,228,774
Ocala, FL MSA $1,060,228
Orlando-Kissimmee, FL MSA $5,337,740
Palm Bay-Melbourne- $988,009
Titusville, FL MSA
Palm Coast, FL MSA $491,109
Panama City-Lynn Haven, FL MSA $379,633
Pensacola-Ferry Pass-Brent, FL MSA $418,907
Port St. Lucie-Ft. Pierce, FL MSA $949,072
Punta Gorda, FL MSA $840,058
Sarasota-Bradenton- $1,547,447
Venice, FL MSA
Sebastian-Vero Beach, FL MSA $723,207
Tallahassee, FL MSA $430,988
Tampa-St. Petersburg- $3,777,804
Clearwater, FL MSA
Northeast Non-metropolitan Area $183,349
Northwest Non-metropolitan Area $716,523
Central Non-metropolitan Area $954,660
Minus Putnam County
South Non-metropolitan Area $377,140
Minus Monroe County


New Construction
Single-
Family


$3,042,256
$617,232

$277,494

$194,699

$2,256,280
$954,253
$3,080,984

$794,506
$1,049,298
$4,571,088
$849,860

$381,623
$103,162
$347,754
$879,502
$649,790
$1,293,761

$680,702
$389,642
$3,309,581

$176,900
$690,729
$947,633

$363,069


Multi-
Family


$690,700
$191,553

$6,122

$71,006

$425,490
$162,402
$3,341,181

$434,268
$10,930
$766,652
$138,149

$109,486
$276,471
$71,153
$69,570
$190,268
$253,686

$42,505
$41,346
$468,223

$6,449
$25,794
$7,027

$14,071


New Units
Total Single-
Units Family


18,746
3,815

1,790

2,380

16,967
9,323
35,567

4,788
7,063
30,984
5,044

1,839
3,076
2,811
6,328
4,335
7,671

3,143
3,018
22,640

1,533
2,202
5,673

2,502


14,700
2,906

1,699


Multi-
Family

4,046
909

91


1,383 997


11,500
7,609
15,180

2,829
6,753
23,646
3,967

1,499
920
2,141
5,572
3,052
5,983

2,839
2,430
18,294

1,410
1,955
5,614

2,355


5,467
1,714
20,387

1,959
310
7,338
1,077

340
2,156
670
756
1,283
1,688

304
588
4,346

123
247
59

147


$35,716,300 $27,901,798 $7,814,502


Tabe 1 Vaue $ 1000) &Numer f Nw UitsContrutedin 00


Total


203,238 146,236 57,002








In 2006, Florida built 146,000 single-family
units and also built 57,000 multi-family units.
Building these units created 587,000 jobs that had
annual earnings of nearly $22.2 billion. This new
construction had an estimated economic impact of
approximately $59.1 billion.


The inquisitive reader is encouraged to obtain a copy
of The State of Florida's Housing, 2007 that will be
available on the Florida Housing Data Clearinghouse
web site as a pdf file in mid-March 2008. The


Affordable Housing ISSUES is prepared bi-monthly by the Shimberg Center for Affordable Housing for the purpose
of discussing contemporary issues facing affordable housing providers. Reproduction of this newsletter is both permitted and
encouraged. Comments or questions regarding the content are welcome and should be addressed to Robert C. Stroh, Director.


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