HomeMy WebLinkAbout05. 183136-Report-08-14-19
Revised Report
Economic Value & Community
Benefits of Resident
Housing Investment
Prepared for:
Vail Local Housing Authority
Prepared by:
Economic & Planning Systems, Inc.
EPS #183136
August 14, 2019
Table of Contents
Executive Summary ............................................................................................ 1 1.
Background ............................................................................................................ 1
Methodology ...................................................................................................... 5 2.
Data Sources .......................................................................................................... 5
Assumptions .......................................................................................................... 7
Economic Context ............................................................................................. 10 3.
Findings .......................................................................................................... 12 4.
Return Metrics ...................................................................................................... 12
Community Benefits ............................................................................................. 14
Economic Value ................................................................................................... 18
Opportunity Costs ................................................................................................ 20
Appendix ......................................................................................................... 22 5.
Terminology ......................................................................................................... 22
List of Tables
Table 1. Vail InDEED Summary ..................................................................................... 7
Table 2. Population Trends, Town of Vail Capture ........................................................... 10
Table 3. Housing Unit Trends, Town of Vail Capture ....................................................... 10
Table 4. Employment Trends, Town of Vail Capture ........................................................ 11
Table 5. Return on Investment .................................................................................... 12
Table 6. Investment Multiplier ..................................................................................... 13
Table 7. Value of Time ............................................................................................... 14
Table 8. Reduction in Carbon Emissions ........................................................................ 15
Table 9. Environmental Impact ................................................................................... 15
Table 10. Value of Volunteerism .................................................................................... 16
Table 11. Schools Impact ............................................................................................. 16
Table 12. Expansion of Total Spending in Vail Economy .................................................... 18
Table 13. Expansion of Total Spending in Vail Economy .................................................... 19
Table 14. Parking Impact ............................................................................................. 20
Table 15. Worker Turnover Costs .................................................................................. 21
Table 16. Daytime Spending ........................................................................................ 23
Table 17. Resident Housing Household Spending ............................................................. 23
Table 18. Commute Detail ............................................................................................ 24
List of Figures
Figure 1. Town of Vail & Eagle Valley Employment Trends ................................................ 11
Economic & Planning Systems
183136-Report-08-14-19 1
Executive Summary 1.
Background
The Town of Vail has made significant financial investments in resident housing
over many decades. Such investments are rooted in an awareness that
affordability and availability of housing for residents and the workforce benefit the
broader Vail economy, business community, the overall community character, and
the quality of the guest experience.
One of Vail’s more innovation and effective investment strategies has been deed-
restriction acquisitions, in which the Town appropriates funds annually to ensure
that homes are available for residents and the workforce. A new deed restriction
purchase program, called Vail InDEED, was recently created to ensure Vail meets
its 2027 Vail Housing 2027 Strategic Plan goal of acquiring 1,000 additional
resident housing unit deed restrictions by the year 2027.
In times of competing community investment priorities and alternatives, it is
important that the benefits of resident housing investment are quantified and
understood by the community and its leadership. For this purpose, the Vail Local
Housing Authority (VLHA) contracted with Economic & Planning Systems (EPS) to
quantify the economic value and community benefits of resident housing
investment on the local economy and community.
Each investment in one resident housing unit generates an annual
return as well as provides economic benefit.
#1 - The direct return back to the Town of Vail
from an investment of $65,000 in one unit of
housing is $3,239 in the form of local sales
tax and revenue for local students. The
annual return on investment to the Town is
5 percent of the initial investment.
#2 - Nearly $312,500 is provided from one
unit in the form of community benefits,
economic value, and opportunity costs to
the community as a whole. This return to the
community is more than four times the initial
investment by the Town, resulting in an
investment multiplier of 4.81X.
Economic Value & Community Benefits of Resident Housing Investment
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Metrics
At the root of the Town’s resident housing investment policies, deed restricted
homes ensure that year-round residents can live and work locally, which ripples
through the economy and reinforces the stability of other sectors of the economy.
It impacts the character of the community through greater potential civic/resident
engagement and presence of school-aged children. It also improves the quality of
the guest experience. In this analysis, these and other elements are presented
collectively and stated in terms of the following broader metrics:
The annual economic value of an investment in 100 units of resident housing
($6.5 million) is:
• $18.1 million as a result of an increase in filled positions,
• $2.6 million in increased local household spending, and
• $116,000 in new local sales tax revenue.
The annual community benefits of an investment in 100 units of resident
housing ($6.5 million) include:
• the elimination of over 40,000 commute hours resulting in $825,000 in the
value of time savings,
• a reduction of 845 metric tons of carbon emissions (MTCO2e),
• $207,000 in State of Colorado revenue in the form of back-fill for 26 school-
aged children, and
• $1.2 million in volunteer labor.
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The annual opportunity cost of an investment in 100 units of resident housing
($6.5 million) is:
• $11.3 million in avoided construction cost for 113 parking spaces and
• $841,000 in saved costs to businesses for worker turnover, training, and lost
productivity.
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Methodology 2.
As noted in the introduction, this approach encompasses three main components
of economic value and community benefit: the economic value; the community
benefits; and the opportunity costs. This section outlines the data and
assumptions for the analysis.
Data Sources
A variety of primary and secondary data sources were used in the analysis. Research
and interviews also supplemented the quantitative and qualitative elements of the
analysis. The following sources were essential to the construction of the methodology:
• U.S. Census Longitudinal Employee Household Dynamics. Prevalence of
in-commuting workforce to Vail.
• Colorado Department of Labor & Employment, Quarterly Census of
Employment & Wages. Number of jobs by industry for Vail.
• Colorado Statewide Nonprofit Industry Survey, 2018. Nonprofit industry jobs
in Eagle County’s workforce and the rate of per-capita volunteerism.
• U.S. Bureau of Labor Statistics. Value of volunteerism per hour.
• Colorado Department of Transportation. Aggregate vehicle miles travelled
(VMT) in Eagle County.
• U.S. Environmental Protection Agency. Calculations for estimating carbon
emissions.
• Eagle County Housing Study and Greater Roaring Fork Regional Resident &
Employer Survey, 2018. For assumptions regarding rate of carpooling,
persons per household, multiple job-holdings.
• IMPLAN. Input-output data for Eagle County at the zip code level.
Economic Value & Community Benefits of Resident Housing Investment
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Types of Economic Impacts
In terms of quantifiable economic contributions, metrics included in this analysis
have been run through IMPLAN input-output modeling software. IMPLAN is
structured to account for trade flows and industry profiles within the defined
economic unit—in this case, the Town of Vail, as represented by the 81657 zip
code. This type of modeling generates a trove of information, which when
consolidated with other information, can be used to estimate the “multiplier
effect” on an initial investment.
Specifically, a multiplier effect is a ratio that characterizes the relationship
between the total of successive rounds of spending resulting from an initial
investment combined with the initial investment itself. For example, the multiplier
in this analysis is calculated as the composite per-unit economic value and
community benefit divided by the Town’s per-unit investment.
There are also three layers of economic impacts. These layers are defined as they
relate to Vail’s investment in resident housing:
Economic Impact Terminology
Direct Impacts are the dollar amounts of net new local resident spending and the net new
economic activity related to greater number of filled positions. These dollar amounts refer to
the first round of spending in an economy.
Indirect Impacts are the dollar amounts associated with the business-to-business
relationships, such as the real estate activity, the purchase of equipment, or the demand for
professional services such as legal, financial and administrative services that may be procured
in the process of meeting demand for a “direct” industry’s good or service. These are referred
to as the second round of spending.
Induced Impacts are activities resulting from the expenditures made by households of the
direct and indirect industry jobs. They are typically retail and service-sector oriented impacts
that are created by what is typically referred to as the third round of spending.
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Assumptions
There are two main layers of assumptions in this analysis: 1) the overarching
investment goal on which the analysis is based; and 2) the underlying assumptions
used to quantify relationships between, for example, the number of persons per
housing unit or the rate of carpooling among all in-commuting workers.
Resident Housing Investment
Housing Targets
As previously noted, the premise of this analysis is rooted
in the Vail Housing 2027 Strategic Plan adopted goal of
acquiring 1,000 additional resident housing unit deed
restrictions by the year 2027. The goal means that the
Town is targeting, on average, the acquisition of 100 deed
restrictions units per year.
Housing Investment
Based on a detailed accounting of the most recent (116)
deed restrictions placed on homes in Vail (between
January 2017 and May 2019), data which were obtained
from the VLHA, the Town invests an average of
approximately $65,000 per unit. It is against this core
assumption that the metrics of return on investment and
the overall investment multiplier are calculated.
Table 1. Vail InDEED Summary
Vail InDEED Program Units Price per Deed
2019 (YTD May)11 $94,618
2018 40 $57,105
2017 65 $65,000
Total 116 $65,327
Source: Town of Vail; Economic & Planning Systems
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Underlying Assumptions
The following are additional assumptions that quantify the relationship
between housing units and persons, local job-holdings, net new jobs,
and carpooling.
Jobs per Unit. Primary data collected locally and regionally indicate
that there is an average of 2.2 jobs per household, meaning that 220
jobs would be represented by 100 households in 100 housing units.
Vail Jobs. As mentioned previously, the Vail InDEED program requires
that a property be occupied as a primary residence by individuals who
work a minimum of 30 hours per week in Eagle County. Based on an
annualized 40-hour work week, this could be approximated as 75
percent of income (and thus, employment) is originated in Eagle County.
For purposes of this analysis, it is an aggregated assumption that 75
percent of job-holders in the resident housing units are working in Vail
(165 jobs).
Net New Jobs to Economy. The analysis also assumes that 75 percent
of these Vail jobs held by occupants of resident housing units are net
new to the economy (i.e. that they are filling unfilled positions or
enabling employers to add new positions). This means that 124 of the
165 jobs are estimated to be new to economy, whereas the remainder
of the 165 would have previously commuted in to their jobs in Vail.
Carpooling. Primary data collected regionally indicates that an average
of 9 percent of the total in-commuting workforce carpool.
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Table 3. Housing Unit Trends, Town of Vail Capture
Housing Unit Trends 2000 2010 2017 Total Δ % Capture
2000-17
Avon 2,557 3,615 4,052 1,495 17%
Eagle 1,116 2,416 2,251 1,135 13%
Eagle-Vail [1]1,482 1,482 1,482 0 0%
Edwards 3,953 5,260 5,386 1,433 16%
Gypsum 1,210 2,205 2,275 1,065 12%
Red Cliff 122 141 123 1 0%
Minturn 448 528 542 94 1%
Vail 5,389 7,230 7,210 1,821 21%
Unincorp. Eagle Valley 3,687 5,394 5,492 1,805 20%
Eagle Valley[2]16,277 22,877 23,321 8,849 100%
[1] Eagle-Vail did not appear on the 2010 decennial census as a CDP.
Source: U.S. Census American Community Survey 5-year estimates; Economic & Planning Systems
[2] Eagle Valley is defined as Eagle County less the Roaring Fork Valley (census tract 3.01 block groups 1-3 and tract 3.02
block group 2)
Table 2. Population Trends, Town of Vail Capture
Population Trends 2000 2010 2017 Total Δ % Capture
2000-17
Avon 5,561 6,447 6,503 942 9%
Eagle 3,032 6,508 6,711 3,679 36%
Eagle-Vail [1]2,887 2,887 2,887 0 0%
Edwards 8,257 10,266 9,202 945 9%
Gypsum 3,654 6,477 6,926 3,272 32%
Red Cliff 289 267 297 8 0%
Minturn 1,068 1,027 1,141 73 1%
Vail 4,531 5,305 5,425 894 9%
Unincorp. Eagle Valley 6,211 5,283 6,678 467 5%
Eagle Valley 35,490 44,467 45,770 10,280 100%
[1] Eagle-Vail did not appear on the 2010 decennial census as a CDP.
Source: U.S. Census American Community Survey 5-year estimates; Economic & Planning Systems
[2] Eagle Valley is defined as Eagle County less the Roaring Fork Valley (census tract 3.01 block groups 1-3 and tract 3.02
block group 2)
Economic Context 3.
This section of the report provides the economic context including population,
housing unit, and employment trends for the Town of Vail in relation to Eagle
County as a whole.
Population
Between 2000 and 2017, the
Eagle Valley grew by a
population of approximately
10,280, which translates to
605 residents per year. Total
population reached 45,770
in 2017 (Table 2). In 2017,
Vail represented
approximately 12 percent of
the Valley population, but
had captured only 9 percent
of the Valley’s population
growth since 2000.
Housing Units
Growth in housing inventory
in Vail outpaced population
growth considerably
(Table 3). By a factor of
more than two to one, more
than 1,800 housing units
were added to the Town’s
housing unit inventory,
indicating that second
homeownership comprised a
majority of the ownership of
the new inventory.
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Employment
In 2018, Vail had an
estimated 8,400 wage and
salary jobs (Table 4),
accounting for 25 percent
of the Valley’s total
employment. Between
2001 and 2018, the Town
added close to 1,300 jobs,
capturing 30 percent of
the Valley’s growth. The
highest growth area in the
valley took place in
Avon/Beaver Creek, which
captured 44 percent of the
Valley’s new employment,
and (as the definition
indicates) includes two distinct commercial nodes of activity.
As shown in the following graphic (Figure 1), employment levels in the Town of
Vail remained fairly steady over the past two decades. Although employment
contracted during the Great Recession (2007-09) for the Eagle Valley, which
decreased by 14 percent (a loss of 3,800 jobs), Vail remained relatively steady.
Figure 1. Town of Vail & Eagle Valley Employment Trends
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Town of Vail Eagle Valley
Table 4. Employment Trends, Town of Vail Capture
Employment Trends 2001 2010 2018 Total Δ % Capture
2001-18
Avon/Beaver Creek 7,571 7,589 9,457 1,886 44%
Eagle 3,424 3,732 4,602 1,178 27%
Eagle-Vail 50 81 110 60 1%
Edwards 3,255 3,155 3,510 255 6%
Gypsum 1,540 1,488 2,477 936 22%
Minturn 520 406 485 -35 -1%
Red Cliff 50 81 110 60 1%
Vail 7,129 7,256 8,416 1,288 30%
Eagle Valley 23,538 23,790 29,167 4,316 100%
Source: QCEW; Economic & Planning Systems
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Findings 4.
There are two primary measurements of economic value and community benefits
estimated in this analysis: 1) return on investment; and 2) investment multiplier.
Return Metrics
The initial investment of $65,000 per unit of resident housing yields magnitudes
of more economic value and community benefit than alternatives such as
persistent business cost of worker turnover and structured parking.
Return on Investment (ROI)
Although many of the broader metrics of benefit can be
considered “returns on investment,” an ROI measured from
the perspective of the investment of ‘public dollars in’ and
‘public dollars out’ captures the two most salient fiscal impacts.
The annual returns on the initial investment are comprised of
sales tax revenues flowing back to Vail annually and the State
of Colorado’s per-unit student back-fill for the school-aged
children living in resident housing is approximately $2,000 per
year (see the following technical discussion for details on this
calculation).
This means that, calculated as a standard investment divided
by its returns, the Town’s (public) return on investment is 5.0
percent. This aligns on the higher end with typical yields on
governmental investment.
Table 5. Return on Investment
Return on Investment per-Unit
Per-Unit Investment ROI
Returns
Annual Resident Household Spending Sales Taxes $1,165
Annual State per-Pupil Apportionment $2,074
Subtotal Returns $3,239
Investment ROI
Return $3,239
Initial Investment $65,000
ROI 5.0%
Source: Economic & Planning Systems
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Investment Multiplier
This metric accounts for the economic activity
captured by direct, indirect, and induced
spending. Examples of components within this
metric include: a) the broader economic metrics
such as the economic value (which includes
taxable spending and the fiscal benefit) to Vail;
b) community benefits; and c) the opportunity
costs such as investing in parking annually to
accommodate a similar level of employment
growth as well as the ongoing costs to the
business community of worker turnover and
lost productivity.
Taking into account each of these components,
the net multiplier of the Town’s investment at
$65,000 per unit is nearly five (5) times at 4.81X.
In benefit-cost analysis (BCA), public entities are
typically trying to achieve a multiplier of three (3)
to five (5) times the initial investment.
Table 6. Investment Multiplier
Return on Investment per-Unit
Per-Unit Investment Multiplier
Economic Metrics
Annual Expansion of Economy $181,122
Annual Net New Resident Household Taxable Spending $21,174
Annual Sales Tax Revenue Generation $1,165
Subtotal Economic Metrics (Net) [1]$181,122
Community Benefits
Annual Household Value of Reduced Commute Time $8,249
Annual Per-Pupil State Backfill $2,074
Subtotal Community Metrics $10,323
Opportunity Cost
Annual Cost of Worker Turnover -$8,410
Cost of Structured Parking -$112,613
Subtotal Opportunity Cost Metrics -$121,022
Investment Multiplier
Composite Return $312,467
Initial Investment $65,000
Multiplier 4.81x
Source: Economic & Planning Systems
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[Note 1]: The net new resident household taxable spending and associated sales tax revenue generation are displayed
for informational purposes; they are, however, theoretically incorporated in the total annual expansion of the economy.
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Table 7. Value of Time
Value of Time Saved not Commuting Factor Value
Total Jobs in Resident Housing 2.2 220
Vail Jobs in Resident Housing 75%165
Estimated Local Job-Cars 9%150
Commute Minutes per Year 2,426,101
Commute Hours per Year 40,435
Value of Time for Intercity Travel (2018)$20.40
Value of Time Saved not Commuting $824,874
Per-Unit $8,249
Source: LEHD on the Map; U.S. Department of Transportation; Economic & Planning Systems
Community
Benefits
For each unit of resident housing, an estimated 400 hours of time and 950 gallons of
gasoline are saved from shorter commutes every year—equating to greater business
productivity and an opportunity for residents to give back to their community.
Reduced Commute Times
More than 40,000 annual commuting hours are avoided by an investment in 100
resident housing units. This equates to approximately $825,000 in value of time
($20.40 per hour of intercity travel). It should be noted that this benefit is
capitalized within the expanded economy calculations shown earlier and not
additive to the investment multiplier estimate.
Economic Value & Community Benefits of Resident Housing Investment
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Table 8. Reduction in Carbon Emissions
Metric Tons of Carbon
Monoxide Equivalency
(MTCO2 e)
All In-
Commuters
Resident
Housing In-
Commuters
Average Distance Travelled 63.3 miles 29.6 miles
# Commuters 3,276 150
Aggregate Vehicle Miles Travelled (VMT)414,586 8,882
Agg. VMT / Year 103,646,600 2,220,594
Aggregate MTCO2e 39,447 845
as % of All In-Commuters 2.1%
Source: LEHD on the Map; Economic & Planning Systems
Reduced Carbon Emissions
The analysis of environmental
impact assumes that fewer
workers need to commute in to
their jobs, decreasing distance
traveled and reducing carbon
emissions. It further assumes
that a greater number of
workers will utilize Vail’s free
public transit.
An analysis of the in-commuter
distribution shows that the
average one-way distance
traveled to Vail is
approximately 63 miles
(Table 8).
It is generally assumed that
in-commuters living in closer proximity to Vail will account for larger shares of
new occupants of resident housing. As such, it was assumed that the average
distance traveled by new occupants of resident housing would have traveled
30 miles.
Over the course of a year, this reduction in commute time totals more than 2.2
million miles and represents more than 2 percent of all vehicle miles traveled by
in-commuters. As a result, overall carbon emissions are reduced in the Vail Valley
by 845 metric tons (2 percent of total estimated Vail in-commuter carbon
emissions). It means that in-commuters save more than 95,000 gallons of
gasoline per year. This annual savings means that enough energy is saved to
charge more than 107 million iPhones, and is equivalent to the air-scrubbing
benefits of nearly 14,000 tree seedlings grown for more than 10 years.
Table 9. Environmental Impact
The Environment Value
Equivalencies of Carbon Emissions
Emissions Reduction (MTCO2e) from Shorter Commutes 845
Gallons of Gasoline Consumed (equivalent)95,083
Number of Smartphones Charged (equivalent)107,747,909
Tree Seedlings Grown for 10 Years (offset)13,972
Source: U.S. Environmental Protection Agency; Economic & Planning Systems
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Table 10. Value of Volunteerism
Value of Volunteerism Factor Value
Total Resident Housing Units 100
Jobs per Unit 2.2
Total Jobs in Resident Housing 220
Estimated Volunteer Hours per Year 201 [1]44,118
Value of Volunteer Time (in CO)$28.02
Estimated Value of Volunteerism in Vail $1,236,200
Per-Unit $12,362
Source: Independent Sector; 2018 Colorado Nonprofit Survey; Economic & Planning Systems
[1] Average annual hours of volunteering per year among nonprofits in a group of northwestern Colorado counties.
Table 11. Schools Impact
Student Generation Total
Town of Vail - Students to Housing Units [1]0.26
Resident Housing Investment 100
Students Generated 26
Per Pupil Revenue (Eagle County Schools)$7,945
Eagle County School Revenue $207,449
Per-Unit $2,074
Source: Economic & Planning Systems
[1] U.S. Census American Community Survey 5-Year Estimates
Volunteerism
In a typical community, a portion of residents volunteer their time to local
nonprofits, including the health care industry, arts and entertainment, or other
community-oriented and civic services.
Using primary data from a statewide study of the nonprofit industry conducted in
2018, it is estimated that volunteerism
among the population in resident housing could be as high as 200 hours per year.
This would contribute more than $1.2 million in labor value to the nonprofit
community in Vail (at $28.02 per hour of volunteer time).
Schools
An estimated 26 school-
aged children are
generated by the
investment in 100 housing
units, for which it is
anticipated that the State
of Colorado back-fills at a
per-pupil rate of $7,945
for Eagle County. This
would contribute more
than $207,000 in revenues
to Eagle County Schools
annually.
Economic Value & Community Benefits of Resident Housing Investment
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Quality of Guest Experience
There is direct linkage between the quality of the guest
experience and the supply of local employees. As part of this
study, a range of employers were interviewed across a variety of
sectors. Those with a high level of interaction with guests, such
as food and beverage or services establishments, noted that they
are concerned about their ability to maintain a high quality level
of service given limited staffing resources. In the case of one restaurant, it chose
to close down seating sections to concentrate the available servers. From its
perspective, the loss of revenue is a reasonable tradeoff, given the otherwise slow
pace of operations.
Other business owners commented that certain high-demand weeks, where the
community is operating at both peak capacity and peak price point, the service
can be the slowest. As Vail’s customer base evaluates its options, it may consider
other destinations that can provide the service expected with Vail’s price point.
The ability to deliver a high quality guest experience is directly correlated to Vail’s
competitive position, not only among ski town destinations but also warm weather
destinations.
Vail’s future economic vitality depends on the ability of businesses to fill positions.
There is concern among some business owners about a decline in quality service
in the recent past. Unfilled positions and the related service quality decline in Vail
may continue without investment in solutions to attract and retain talent. It was
also noted that guests are likely to feel more connected to Vail if they interact
with employees who live locally, over an extended period of time, who are invested
in the community. This type of employee conveys a commitment that resonates
with guests and reinforces the premium brand Vail has built over the decades.
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Economic
Value
Expansion of the Economy due to Filled Positions
The availability of additional homes for residents and the workforce translates to a
greater jobs market and fewer unfilled positions. It is estimated that
approximately 123 full- and part-time positions would be filled as a result of Vail’s
resident housing investment (100 units), thereby expanding Vail’s economy by an
estimated $18.1 million annually (1.2 percent increase).
Table 12. Expansion of Total Spending in Vail Economy
Return on Investment
Local Business Revenue Direct Indirect Induced Total
11 Ag, Forestry, Fish & Hunting $76,853 $698 $267 $77,818
21 Mining $0 $7,244 $210 $7,454
22 Utilities $0 $5 $7 $12
23 Construction $2,838,283 $81,277 $14,527 $2,934,087
31-33 Manufacturing $0 $4,607 $1,237 $5,844
42 Wholesale Trade $610,911 $20,786 $7,855 $639,552
44-45 Retail trade $906,678 $248,706 $259,371 $1,414,755
48-49 Transportation & Warehousing $0 $79,051 $28,983 $108,034
51 Information $0 $39,827 $22,752 $62,579
52 Finance & insurance $459,252 $438,401 $204,832 $1,102,485
53 Real estate & rental $741,771 $520,976 $397,111 $1,659,858
54 Professional- scientific & tech svcs $458,698 $283,170 $46,160 $788,028
55 Management of companies $0 $156,752 $17,180 $173,932
56 Administrative & waste services $240,281 $87,143 $19,199 $346,623
61 Educational svcs $237,132 $6,627 $42,498 $286,257
62 Health & social services $365,213 $3,600 $361,779 $730,592
71 Arts- entertainment & recreation $890,357 $63,417 $60,260 $1,014,034
72 Accommodation & food services $2,904,377 $65,913 $172,932 $3,143,222
81 Other services $2,763,965 $87,711 $102,288 $2,953,964
92 Government $625,894 $17,191 $19,979 $663,064
93 Non NAICs $0 $0 $0 $0
Annual Expansion of Economy $14,119,665 $2,213,102 $1,779,427 $18,112,194
Per-Unit $141,197 $22,131 $17,794 $181,122
Source: Economic & Planning Systems
Ripple Effects (Total Output Expansion)
Economic Value & Community Benefits of Resident Housing Investment
18
Resident Household Spending
Local resident households spend more of their income on retail goods and services
in Vail than the daily spending patterns of in-commuters. It is estimated that
Vail’s resident housing investment yields a net new local resident household
spending of approximately $2.6 million per year.
Town of Vail Fiscal Benefits
Out of the net new local resident household spending it is estimated that $2.1
million is taxable spending, which generates more than $116,000 of sales tax
revenues for Vail per year.
Table 13. Expansion of Total Spending in Vail Economy
Return on Investment Total Taxable Ann. Tax Rev
Net New Local Spending 5.5%
11 Ag, Forestry, Fish & Hunting $98
21 Mining $145
22 Utilities $2
23 Construction $12,064
31-33 Manufacturing $610
42 Wholesale Trade $3,296
44-45 Retail trade $1,703,757 $1,703,757 $93,707
48-49 Transportation & Warehousing $29,821
51 Information $10,066
52 Finance & insurance $71,120
53 Real estate & rental $179,977
54 Professional- scientific & tech svcs $56,138
55 Management of companies $39,085
56 Administrative & waste services $14,980
61 Educational svcs $8,384
62 Health & social services $57,040
71 Arts- entertainment & recreation $12,994
72 Accommodation & food services $413,628 $413,628 $22,750
81 Other services $30,088
92 Government $6,318
93 Non NAICs $0
Annual Net New Spending $2,649,611 $2,117,385 $116,456
Per-Unit $26,496 $21,174 $1,165
Source: Economic & Planning Systems
Economic & Planning Systems
19
Opportunity
Costs
In this analysis, two primary metrics are considered opportunity costs: 1) the
Town’s alternative of investing in structured parking for in-commuters; and 2)
business costs associated with worker turnover, training, and lost productivity. It
is acknowledged that another alternative Town investment to structured parking
could be enhanced transit services and the capital and operational costs
associated with it. For the purposes of simplifying the analysis, structured parking
was evaluated as the core alternative.
Every year that Vail does not invest in resident housing and seeks to
accommodate or incent economic growth means that either: a) Vail must build
parking to accommodate the growing number of in-commuters and guests; or b)
Vail’s business community must endure perpetual business costs associated with
worker turnover, training, and lost productivity.
In the overall analysis, opportunity costs are capitalized into estimates of return
(i.e. the investment multiplier calculation) since they represent avoided costs to
the economy.
Parking
The first of the
opportunity costs
relates to the costs of
accommodating an
expanding in-
commuting workforce.
This cost is based on
the recent construction
of structured parking in
Vail at approximately
$100,000 per space,
but does not include
the cost of land.
This opportunity cost is further
augmented by the fact that this
would be an annual cost to Vail if it were to parallel to the goal of investing in 100
units of resident housing per year.
As shown in Table 14 above, the cost of structured parking for an approximately
113 cars per day (accounting for local/non-local jobs, net new jobs to the
economy, and carpooling) would be $11.3 million.
Table 14. Parking Impact
Opportunity Cost Factor Value
Parking Investment
Resident Housing Investment 100
Jobs Represented by Housing Investment 2.2 220
Vail Jobs 75%165
Net New Jobs to Economy 75%124
New Cars Needing Parking 9%113
TOV Parking Cost per Space $100,000
TOV Parking Investment Opportunity Cost $11,261,250
Per-Unit $112,612.50
Source: Economic & Planning Systems
Economic Value & Community Benefits of Resident Housing Investment
20
Table 15. Worker Turnover Costs
Opportunity Cost Factor Value
Resident Housing Investment 100
Jobs Represented by Housing Investment 2.2 220
Vail Jobs 75%165
Net New Jobs to Economy 75%124
Average annual training cost per jobs that would
otherwise "turnover"$6,796
Annual Business Costs of Turnover, Loss of
Productivity, and Training $840,959
Per-Unit $8,409.59
Source: QCEW; Center for American Progress; Economic & Planning Systems
Local Business Revenue (Cost Associated
with Job Turnover, Loss of Productivity, and
Training)
Worker Turnover
If Vail opted to invest in resident housing (not parking), research and analysis
indicates that local businesses could reduce their annual costs associated with
turnover, job training, and lost productivity by an estimated $840,000 per year.
This estimate reflects the weighted average of annual turnover costs for positions
in different industries at different annual wage levels.
Economic & Planning Systems
21
Appendix 5.
Terminology
Area Median Income (AMI) is a metric that identifies the point of a target geography’s
income distribution at which 50 percent of household earn more and 50 percent earn less.
Percentages, such as 60, 80, 100, 120 percent of AMI are typically used to isolate levels of
affordability within the distribution of households by income. The source of these data points
is the Department of Housing and Urban Development, which defines local AMI annually.
Community Benefit broadly refers to the other quantitative and qualitative benefits, such
as: 1) reduction in worker commute time; 2) reduction in carbon emissions resulting from
shorter commutes; 3) presence of school aged children; 4) greater community and civic
involvement; and 5) enhanced quality of guest experience.
Deed Restriction refers to a covenant in which it is stipulated that a property must be
occupied as a primary residence by individuals who work a minimum of 30 hours per week
in Eagle County.
Gross Regional Product (GRP) is a measure of regional economic activity that includes
employee compensation, business/corporate profits, and local tax revenue generation.
Investment Multiplier is a measure, expressed as a ratio of broader economic returns (as
measured by three components in this particular study) to an initial investment. The three
components include: 1) the impact on the broader economy; 2) community benefits such
as reduction in commute times and carbon emissions, increased volunteerism and presence
of school-aged children; and c) the opportunity costs such as Vail alternatively investing in
structured parking or enhanced transit service.
Opportunity Cost is the highest price or rate of return an alternative course of action, i.e.
an investment, would yield. In this analysis, opportunity costs are characterized as: 1) the
cost to provide structured parking, which could also be an alternative to increased transit
service investment; and 2) the annual cost of worker turnover to the business community.
Output is a measure of total economic activity, also called “total spending”, that
characterizes the sum of successive rounds of industry, business-to-business, and
household spending. As an example, output in the residential construction industry would
be equal to the purchase price of a housing unit.
Quarterly Census of Employment and Wages (QCEW) is the Colorado Department of
Labor & Employment’s (CDLE) record of employment and wages for all of the state’s
employers. Records are reported at the individual establishment (i.e. address) level.
Individual employer records are protected by confidentiality agreement.
Resident Housing refers to a deed-restricted for-sale or rental housing unit (new
construction, rehabilitation, acquisition, or existing). Data to estimate the average per-unit
investment were obtained through the VLHA.
Return on Investment (ROI) is an amount, typically expressed as a percentage, earned
on an initial investment. The metric is calculated by dividing the initial investment (e.g. in
resident housing) by the earnings before interest, debt, and taxes.
Economic Value & Community Benefits of Resident Housing Investment
22
Table 16. Daytime Spending
Return on Investment Input Value
Resident Housing Investment 100
Jobs Represented by Housing Investment 2.2 220
Vail Jobs 75%165
Net New Jobs to Economy 75%124
Number of Previously In-Commuting Job-Holders (Diff.)41
Total Daily Spending by In-Commuting Job-
Holders (ICSC)$20
Annual Spending by In-Commuting Job-Holders $206,250
Source: ICSC; Economic & Planning Systems
Resident Household Spending (Calculation
Part 1)
Table 17. Resident Housing Household Spending
Return on Investment Value
Resident Household Spending (Calculation Part 2)
Resident Housing Investment 100
Resident Households 100
Household Median Income (approximately 80% AMI)$64,000
Income Spent on Retail (NAICS 44/45)35%
Gross Income Spent on Retail $22,400
Aggregate Income $2,240,000
Food Services $417,325
Retail $1,822,675
Source: ICSC; Economic & Planning Systems
Economic & Planning Systems
23
Table 18. Commute Detail
All Colorado In-Commuters to
the Town of Vail, 2015
Distance (Miles)Commuters
Edwards CDP, CO 14.1 miles 572
Denver city, CO 97.1 miles 295
Avon town, CO 10.0 miles 292
Eagle town, CO 30.3 miles 222
Gypsum town, CO 37.2 miles 198
Minturn town, CO 7.3 miles 125
Leadville city, CO 37.5 miles 97
Leadville North CDP, CO 37.5 miles 84
Aurora city, CO 111.0 miles 74
Colorado Springs city, CO 140.0 miles 68
Boulder city, CO 108.0 miles 67
Lakewood city, CO 92.5 miles 52
Fort Collins city, CO 157.0 miles 45
Glenwood Springs city, CO 60.9 miles 39
Breckenridge town, CO 36.0 miles 37
Highlands Ranch CDP, CO 107.0 miles 37
Centennial city, CO 108.0 miles 32
Red Cliff town, CO 16.0 miles 32
Arvada city, CO 95.0 miles 29
Frisco town, CO 26.5 miles 26
Basalt town, CO 84.0 miles 24
Aspen city, CO 102.0 miles 23
Broomfield city, CO 107.0 miles 23
Carbondale town, CO 73.9 miles 22
Longmont city, CO 130.0 miles 22
Silverthorne town, CO 30.2 miles 21
Westminster city, CO 99.8 miles 21
El Jebel CDP, CO 79.7 miles 20
Grand Junction city, CO 147.0 miles 19
Loveland city, CO 144.0 miles 19
Thornton city, CO 104.0 miles 19
New Castle town, CO 73.1 miles 18
Rifle city, CO 87.5 miles 17
Castle Rock town, CO 123.0 miles 15
Englewood city, CO 101.0 miles 15
Dotsero CDP, CO 42.5 miles 14
Ken Caryl CDP, CO 97.0 miles 14
Parker town, CO 118.0 miles 14
Steamboat Springs city, CO 93.1 miles 14
Craig city, CO 118.0 miles 13
Dakota Ridge CDP, CO 93.8 miles 12
Twin Lakes CDP, CO 57.7 miles 12
Silt town, CO 80.0 miles 11
Columbine CDP, CO 99.4 miles 10
Commerce City city, CO 103.0 miles 10
Dillon town, CO 31.8 miles 10
Littleton city, CO 103.0 miles 10
Other 126.8 miles 411
Average/Total 63.3 miles 3,276
Source: LEHD on the Map; Economic & Planning Systems