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Benefits Outweigh Costs of New South Carolina Housing

Home Builders Association of South Carolina

New homes generate an average of $1,412 more than they cost local governments, according to an independent study released by the South Carolina Association of Realtors(R) and the Home Builders Association of South Carolina.

Examining the development of 1,091 units in six residential subdivisions in Berkeley, Greenville and Lexington counties, the study -- prepared by Impact DataSource, an economic research firm in Austin, Texas -- estimated that the activity added more than $2.9 million of additional revenue to local taxing districts on a one-time basis and 1,448 direct and indirect construction jobs.

The developments then continue to generate surplus community funds through taxes, spending by the new residents and an increased demand for workers. The annual personal income of the residents of the subdivisions was calculated at more than $78 million.

The estimated $6.7 million in the annual benefits of the development to cities, counties and school districts exceeded the $5.1 million in annual costs by more than $1.5 million, the study found.

Of the $25.2 million spent by the developers on the six subdivisions, $11.8 million was for infrastructure dedicated to local governments and utilities, including streets sidewalks, drainage improvements and off-site improvements.

The study points out that most South Carolina governments have adopted policies and ordinances that shift almost all of the cost of new residential development and related infrastructure to the developer, builder and, ultimately, to the new home owner.

Because government services such as police stations, fire stations, utilities and schools tend to serve large benefit areas, the growth in the tax base associated with each individual development is sufficient to cover any marginal costs, the study says. For instance, the money generated by new families joining a school district provides more than enough funds for schools to pay for extra classrooms, teachers and learning materials.

courtesy of Nation's Building News

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December 6, 2019, 12:41 pm PDT

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