Economic benefits of MDOC housing program activities : information in support of the Montana Consolidated Plan for plan year beginning April 1, 2003, final report

40 Pages·2002·1.1 MB·English

by  Montana. Dept. of Commerce

s
363.2 X A
C18eb ^vT A
Ki
2002
#
Department of Commerce
ECONOMIC
BENEFITS
OF MDOC HOUSING
PROGRAM
ACTIVITIES
Prepared in Conjunction withi tlie
IVIontana Consolidated Plan Update
For Plan Year Beginning
April 1,2003
FINAL REPORT
JPJE DOCUMENTS COLLECTION
MAR 1 7 2003
Montana state library
1515 E. 6th AVE.
HELENA, MONTANA 59620
December 2002
t=}
MONTANA STATE LIBRARY
EQUAL HOUSING
OPPORTUNITV
MONTANASTATELIBRARY
3 0864 1001 8352 7
Economic
Benefits
of
MDOC
{Housing
Program
Activities
Information in Support of the Montana Consolidated Plan
For Plan Year Beginning
April 1,2003
FINAL REPORT
Prepared by:
Western Economic Services, LLC
212 S.E. 18th Avenue
Portland, Oregon 97214
[phone]
Fax: [phone]
E-mail: [email protected]
December 2002
Montana Department of Commerce
EQUAL HOUSING
OPPORTUNITV
MontanaDepartmentofCommerce Economic BenefitsofMDOC ProgramActivities
December 17, 2002
We make every effort to ensure our documents are
fully accessible to persons with disabilities.
Alternative accessible formats of this document will
be provided upon request. Please contact the
Montana Department of Commerce at 406-841-2820 or
TDD
406-841 -2702.
Montana DepartmentofCommerce Economic BenefitsofMDOC ProgramActivities
December 17, 2002
TABLE OF CONTENTS
Page
EXECUTIVE SUMMARY
1
INTRODUCTION
3
ECONOMIC BENEFITS OF MDOC HOUSING PROGRAMS 5
Montana Board of Housing 6
HUD
Rental Assistance Programs 8
HOME
Investment Partnerships Program 10
CDBG
Housing Program 11
Summary 13
APPENDIX A - Overview ofMethodology 15
Program Expenditures 16
Summary 19
APPENDIX B - Model Inputs and Parameters 20
Tax Rates 20
Non-basic/Basic Multipliers 25
Impact Coefficients 27
Model Assumptions 27
Summary 30
LIST OF REFERENCES 31
Montana DepartmentofCommerce J Economic BenefitsofMDOC ProgramActivities
December 17. 2002
MontanaDepartmentofCommerce ii Economic BenefitsofMDOC ProgramActivities
December 17. 2002
423
INDEX OF TABLES
EXECUTIVE SUMMARY Page
MDOC
Table A: Total Economic Benefits of Housing Projects 1
ECONOMIC BENEFITS OF MDOC HOUSING PROGRAMS
MDOC
Table 1: Total Economic Benefits of Housing Projects 5
MBOH
Table 2: Total Economic Benefits of Single-Family Loan Program Expenditures 6
MBOH
Table 3 Total Economic Benefits of Multi-Family Housing
:
Rental Program Expenditures 7
Table 4: Total Economic Benefits ofLow Income Housing Tax Credit Program
Expenditures 8
MDOC
Table 5: Total Economic Benefits of Section 8 and Tenant Based Rental
Assistance Program Expenditures 9
HOME
Table 6: Total Economic Benefits of Program Single-Family Program
Expenditures 10
HOME
Table 7: Total Economic Benefits of Program Multi-Family Program
Expenditures 11
Table 8: Total Economic Benefits ofCDBG Housing Program Expenditures 11
Table 9: Total Economic Benefits of CDBG Housing and HOME Program
Administration Fees 12
APPENDIX A OVERVIEW OF METHODOLOGY
-
MBOH
Table A.1 Section 8 and Expenditures 1985-2002 17
Table A. LIHTC Market Values 1987-2002 17
Table A. CDBG Housing Expenditures Computed 1988-2002 18
HOME
Table A. Program Expenditures Computed 1992-2002 19
APPENDIX B MODEL INPUTS AND PARAMETERS
-
Table B.l Montana Residential Property Values 1985- 2000 21
Table B.2 Montana Property Taxable Value Rates 1985-2000 21
Table B.3 Montana Residential Property Taxable Values 1985-2000 21
Table B.4 Montana Residential Property Taxes Levied 1985-2000 22
Table B.5 Montana Property Tax Mill Levies 1985-2000 22
Table B.6 Montana Property Tax Rates 1985-2000 22
Table B.7 Montana Income Tax Analysis 1985-2000 23
Table B.8 Non-basic/Basic Multipliers 25
Table B.9 Non-basic Income Per Employee 25
Table B.10: Impact Coefficients, 1000s of Real 2001 Dollars Per Employee 27
Montana DepanmemofCommerce iii Economic BenefitsofMDOC ProgramActivities
December 17. 2002
MontanaDepartmentofCommerce iv Economic BenefitsofMDOC ProgramActivities
December 17. 2002
Executive Summary
EXECUTIVE SUMMARY
ECONOMIC BENEFITS OF MDOC HOUSING PROGRAMS
The Montana Department of Commerce (MDOC) administers several programs that subsidize
rents or grant or loan funds to individuals, local governments, and nonprofit agencies for
investment in housing development and activities throughout the State. These programs are:
HOME
Tenant and Project Based Section 8 Rental Assistance Programs, Investment
Partnerships (HOME) Program, the Community Development Block Grant (CDBG) Program,
and activities of the Montana Board of Housing (MBOH). Such investments contribute
significantly to the State's economy, helping to create decent paying jobs, and in turn,
increasing income tax revenues and property tax receipts.
MDOC
The has determined the economic benefits generated by these investments over the last
eighteen years by the use of an economic model that calculates employment, personal income,
and income and property taxes paid as a result of each program investment. The model then
computes secondary economic impacts, as the initial investment circulates through the State's
economy. This represents additional employment, income, and tax effects.
MDOC
From 1985 through 2002, Housing programs have distributed nearly $1.6 billion,
creating over 34,567 jobs, over $910 million of personal income, over $21.1 million of State
income tax revenues, and in excess of $170.2 million of State and local property tax receipts,
as seen in Table A.
TABLE A
TOTAL ECONOMIC BENEFITS
MDOC HOUSING PROJECTS
MarketValue Jobs
ofProgram Produced IncomeTax Property Tax
Year Investments Income$ Annually Revenues $ Receipts$
1985 117,332,091 50,667,573 2.860 2,482,910 1,097,951
1986 80,748,050 39,153,853 1,999 1,760,888 1,819,830
1987 25,076,597 21,212,331 835 770,468 2,196,614
1988 50,912,832 32,203,080 1,423 684,146 2,570,629
1989 58,113,193 34,657,862 1,486 684,940 3,348,552
1990 47,302,660 32,100,799 1,258 604,130 4,415,104
1991 75,817,899 42,394,822 1,720 855,712 5.444,898
1992 66,531,382 40,671,221 1,532 792,353 6,368,753
1993 40,644,116 34,147,346 1,107 643,864 7,118,397
1994 42,000,741 38,838,117 1,243 639,300 7,876,348
1995 98,110,805 54,794,070 2.060 1,053,122 9,376,555
1996 72,376,850 41,063,411 1,517 812,097 10,744,815
1997 119,617.640 65,024,821 2,397 1.286,917 12,424.040
1998 115,937,720 61,949,848 2,225 1,262,956 14,203.959
1999 116.640.541 63,004,204 2,255 1,349,749 16,288,228
2000 149.619.980 77.182.717 2,733 1,665,681 19,267,480
2001 145,378,016 74.912,188 2,616 1,616,986 21,575,626
2002 171,352,149 107,019.509 3,299 2,152,517 24,106,049
SUM OF BENEFITS 1,593,513,262 910,997,772 34,567 21,118,737 170,243,828
Montana DepartmentofCommerce EconomicBenefitsofMDOC ProgramActivities
December 17. 2002
ExecutiveSummary
In 2001 and 2002, more than $316.7 million was spent to improve housing, thereby stimulating
Montana's economy'. Because ofthese expendimres:
• Personal income rose $182.1 million
• More than 5,900 jobs were created
• Montana income tax revenue rose by more than $3.7 million
• Montana property tax receipts increased by some $45.6 million
However, the beneficial effects of these programs are not just limited to economic
MDOC
improvements for Montanans. housing projects improve the quality of life of
Montanans by increasing the availability of decent, safe, affordable housing and enhancing the
worth of the living environment for all Montanans. Together, these activities have and will
continue to impart significant long-term benefits to Montana and its citizens.
' Thisstudy, conducted m 1996, 1998, and2000, haspreviouslycomputedthecombinedimpactsofMDOC'sinfrastrucmreandeconomic
developmentprograms. However, these werenotcalculatedfortheanalysiscontainedherein.
MontanaDepartmentofCommerce 2 Economic BenefitsofMDOC ProgramActivities
December 17, 2002