Points in Opposition to a New Homes Moratorium
Moratoriums hurt property values
A moratorium to eliminate or reduce the number of building permits issued delays the completion of subdivisions that are not completely built. As a result, property values of the current residents in the subdivision will see a decrease in their property values because construction and absorption rates will be slowed dramatically.
In the short term, a moratorium raises prices by limiting buyer access to new homes.
In the long run, a moratorium reduces the number of overall buyers in a community, thereby hurting home values and re-sale potential.
Building generates significant revenue
On average across the country, the building of 100 single-family homes generates the following according to the National Association of Home Builders:
- $11.6 million in new income to local businesses and workers in the first year of construction, and $2.8 million every year thereafter, and;
- 250 jobs in the local community during the first year of construction and then 65 jobs every year thereafter.
Communities that enact moratoriums are viewed as 'anti-growth'
The impact of a moratorium will be felt for many years beyond the one year time frame as buyer and builder financing lapses, property values decline, development is moved to other areas and the community is viewed as anti-growth and not welcoming new citizens.
Commercial growth that is needed to help fund schools will be discouraged as retailers, restaurants and businesses need residential rooftops and consumers to grow and succeed.
Without new revenue, residents don't get new services...
Eliminating growth deprives the community of the additional tax revenues and development fees necessary to improve services -- schools, utilities, roads -- demanded by its residents. Without these additional resources, the financial burden of improvements will be born solely by current residents in the form of increased property taxes and service fees.
NOTE: Members of the Columbus Board of REALTORS® do not oppose smart growth management. However, severe density limitations (i.e. 2 units per acre) and building moratoriums do not fall under the category of 'smart' growth initiatives.
To read the article written by CBR CEO Larry Metzger addressing the Pickerington City Council's proposed moratorium on building permits, click here.
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