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Development industry cluster in Hillsborough County

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Title:
Development industry cluster in Hillsborough County
Physical Description:
1 online resource (iii, 14 p.) : ;
Language:
English
Creator:
University of South Florida -- Center for Economic Development Research
Publisher:
Center for Economic Development Research
Place of Publication:
Tampa, Fla
Publication Date:

Subjects

Subjects / Keywords:
Industrial clusters -- Florida -- Hillsborough County   ( lcsh )
Economic conditions -- Hillsborough County (Fla.)   ( lcsh )
Genre:
non-fiction   ( marcgt )

Notes

Abstract:
Commissioned by the Tampa Bay Regional Coalition, this report analyzes the development industry cluster in Hillsborough County to estimate the economic impacts, such as a loss of jobs, on Tampa Bay's economy, if there were to be a sharp reduction of development activity in the area.
Statement of Responsibility:
an analysis performed by Center for Economic Development Research, College of Business Administration, University of South Florida.
General Note:
Title from PDF of cover (viewed Aug. 12, 2009).
General Note:
"August 2002."

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University of South Florida Library
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University of South Florida
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All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 002023609
oclc - 430187450
usfldc doi - C63-00017
usfldc handle - c63.17
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SFS0000295:00001


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Development Industry Cluster in Hillsborough County An Analysis Performed by CENTER FOR ECONOMIC DEVELOPMENT RESEARCH College of Business Administration1101 Channelside Dr., 2nd Floor N., Tampa, Florida 33602 Office: (813) 905-5854 or Fax: (813) 905-5856August, 2002

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i i Preface The Tampa Bay Regional Coalition is a trade association of land development, construction, building materials and related businesses. In 2001, the Coalition commissioned the Center for Economic Development Research (CEDR), College of Business Administration, University of South Florida, to conduct a four-part study of the development industry cluster in Tampa Bay. In May, 2002, CEDR published its final report of the four-part study. Since that time, growth management issues in Hillsborough County have come to the forefront of public debate, with ongoing discussions for imposing a moratorium on new development. The Coalition has commissioned CEDR to perform further analysis of the effect of such an action. The purpose of the study is to analyze the development industry cluster in Hillsborough County to determine the levels of activity and potential economic effects to this industry should activity be curtailed. This is a final report on the economic impacts on Tampa Bay’s economy, if there were a sharp reduction of development activity in Hillsborough County. CEDR released a preliminary report to the Tampa Bay Coalition in July 2002. CEDR provides information and conducts research on issues related to economic growth and development in the Nation, in the state of Florida, and particularly in the central Florida region. The Center serves the faculty, staff, and students of the College of Business Administration, the University, and individuals and organizations in the University’s service area. CEDR’s activities are designed to further the objectives of the University and specifically the objectives of the College of Business Administration Robert Anderson, Dean, College of Business Administration (COBA), USF Dennis G. Colie, Director, Center for Economic Development Research (CEDR), COBA, USF, Economist and Principal Investigator Alexander A. McPherson, Research Associate, CEDR, COBA, USF

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ii ii Executive Summary The purpose of this study is to estimate the economic impacts, such as a loss of jobs, on Tampa Bay’s economy, if there were a sharp reduction of development activity in Hillsborough County. This study is an extension of a previous study. The previous study is titled “Development Industry Cluster in Tampa Bay,” an analysis performed by the Center for Economic Development Research, College of Business Administration, University of South Florida, dated May 2002.First, we assess the baseline of economic activity for the Cluster in Hillsborough County. There are over 52,000 jobs in the Development Industry Cluster in Hillsborough County. These jobs account for about 6.7% of all jobs in the County. The workers in these jobs produce almost $6 billion of output annually. This output is nearly 10% of all goods and services produced in Hillsborough County each year. Next, we assess the economic contribution of the Development Industry Cluster in Hillsborough County using the traditional counter-factual approach. With this approach, we use the REMITM model to simulate complete removal of the baseline output produced by the primary industries of the cluster in the County. The model tabulates the direct effects of the removal as well as the ripple, or secondary, effects throughout the Tampa Bay economy. The Hillsborough County’s Development Industry Cluster contributes more than 100,000 jobs to the Tampa Bay economy. In 2002, firms located in Hillsborough County are contributing 90,000 of those jobs And the Development Industry Cluster firms, which are based in Hillsborough County, annually contribute more than $10 billion of economic activity in Tampa Bay. $9.3 billion of that economic activity takes place within the County. The Development Industry firms in Hillsborough County contribute about 15% of the total annual output in the County. After quantifying the economic contribution of all of the primary industries of the Development Industry Cluster in Hillsborough County, we build a new baseline to use with a “what if” simulation of a slowdown of development-driven economic activity in the County. A new baseline is needed because the slowdown scenario does not include all of the primary industries of the Cluster. The slowdown scenario is an assumed restriction on issuance of new residential and commercial building permits in Hillsborough County. Thus, we do not include all of the primary industries from the Development Industry Cluster as previously defined. Predicated on the assumptions we selected for the slowdown scenario, we estimate that about 90% of the economic activity of the construction industries and about 16% of real estate industry activity in Hillsborough County will cease. Employment, output and personal income measure the economic impact of the slowdown. Almost 85,000 people working in Tampa Bay are expected to lose their jobs within six months after the restriction is imposed. About 75,000 of those jobs would be lost by people working in Hillsborough County. That is, nearly one out of ten workers in Hillsborough County would be affected.

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iii iii As measured by output, we expect that only one-quarter of annual output would be lost in 2002. In 2002, just over $2 billion of output would be lost; about $1.8 billion of the $2 billion would be lost output for goods and services usually produced in Hillsborough County. In 2003, we value the full year’s expected decline in output at $7.9 billion for Tampa Bay of which $7.1 billion would be for goods and services usually produced in Hillsborough County. And, as measured by income, we expect that only one-quarter of annual income would be lost in 2002. In 2002, the residents of Tampa Bay would be expected to lose about $935 million of labor and property income. Residents of Hillsborough would lose about $823 million out of the total Tampa Bay loss of income of $935 million. In 2003, the expected decline in personal income is estimated at slightly over $4 billion for Tampa Bay residents. For Hillsborough County’s residents the anticipated loss in 2003 is just over $3.5 billion. In summary, we estimate the following economic impacts for Hillsborough County due to a shock to the economy by a restriction on issuance of new building permits in the County. People working in Hillsborough County would lose approximately 75,000 jobs about six months after the slowdown in development activity. These lost jobs equate to a decline of $1.8 billion of output of goods and services usually produced in Hillsborough County. And, the residents of Hillsborough County lose $823 million of personal income. With the restriction presumed to last throughout the year 2003, the losses of output and income in Hillsborough County mount. There are also economic impacts that are expected to spillover into other counties in the Tampa Bay region.

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1 1 The Development Industry Cluster in Hillsborough County The purpose of this study is to estimate the economic impacts, such as a loss of jobs, on Tampa Bay’s economy, if there were a sharp reduction of development activity in Hillsborough County. This study is an extension of a previous study. The previous study is titled “Development Industry Cluster in Tampa Bay,” an analysis performed by the Center for Economic Development Research, College of Business Administration, University of South Florida, dated May 2002. We refer to the analysis reported in May 2002 as the basic study We begin this study by using the primary industries defined in Section 2, An Operational Definition of the Development Industry Cluster, of the basic study to develop the baseline of the Development Industry Cluster in Hillsborough County. The baseline provides a basis from which we assess the economic contribution of the Development Industry Cluster in Hillsborough County. The measures of the baseline economic activity are employment and output. Table 1 shows the baseline estimates. There are over 52,000 jobs in the Development Industry Cluster in Hillsborough County. These jobs account for about 6.7% of all jobs in the County. The workers in these jobs produce almost $6 billion of output annually. This output is nearly 10% of all goods and services produced in Hillsborough County each year.Table 1 Hillsborough County Development Industry Cluster REMI Baseline Primary Industries: Construction Major Industry Groups plus Subdividers and Developers (SIC 6552) and Nonresidential Building Operators (SIC 6512) EMPLOYMENT (000s) 20022003 Total County Employment783.506798.732 Cluster Employment52.93753.396 Cluster Employment as % of County Employment6.76%6.69% OUTPUT (Bil. 01$) 20022003 Total County Outout61.82464.024 Cluster Output5.8665.990 Cluster Output as % of County Output9.49%9.36%

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2 2 Next, we assess the economic contribution of the Development Industry Cluster in Hillsborough County using the traditional counter-factual approach. With this approach, we use the REMITM model to simulate complete removal of the baseline output produced by the primary industries of the cluster in the County. The model tabulates the direct effects of the removal as well as the ripple, or secondary, effects throughout the Tampa Bay economy. This assessment of economic contribution differs from that discussed in Section 5, Economic Contribution of the Development Industry Cluster, of the basic report in that only primary-industry output that is produced in Hillsborough County is virtually removed from the economy, instead of primaryindustry output from all counties of Tampa Bay. However, the ripple effect is allowed to spread throughout Tampa Bay to permit us to assess the contribution of primary-industry economic activity on neighboring counties as well as the contribution in Hillsborough County. Employment, output and personal income measure the economic contribution. That is, firms hire a number of workers (employment), who produce goods and services of value (output). Output is equal to sales plus or minus an inventory adjustment. The value-added – less indirect business taxes – from production (personal income) is distributed among the workers and the owners of the capital that the workers use in the production process. Table 2 reports the economic contribution of Hillsborough County’s Development Industry Cluster to Tampa Bay as measured by employment. The County’s Development Industry Cluster contributes more than 100,000 jobs to the Tampa Bay economy. In 2002, firms located in Hillsborough County are contributing 90,000 of those jobs .

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3 3Table 2 Hillsborough County Development Industry Cluster REMI Counter-factual Removal Primary Industries: Construction Major Industry Groups plus Subdividers and Developers (SIC 6552) and Nonresidential Building Operators (SIC 6512) EMPLOYMENT Panel APanel B Total Employment (000s)Total Employment (000s) before Removalafter Removal Location20022003Location20022003 Hernando43.85244.595Hernando43.45544.202 Hillsborough783.506798.732Hillsborough693.506710.952 Manatee159.296162.159Manatee158.494161.398 Pasco105.737107.122Pasco103.896105.231 Pinellas580.113586.852Pinellas574.100581.103 Polk245.968250.046Polk244.059248.161 Sarasota215.068218.125Sarasota214.232217.345 Tampa Bay2133.5402167.631Tampa Bay2031.7422068.392 Panel CPanel D Difference in Employment (000s)Difference in Employment (% change) after Removalafter Removal Location20022003Location20022003 Hernando-0.397-0.393Hernando-0.91%-0.88% Hillsborough-90.000-87.780Hillsborough-11.49%-10.99% Manatee-0.802-0.761Manatee-0.50%-0.47% Pasco-1.841-1.891Pasco-1.74%-1.77% Pinellas-6.013-5.749Pinellas-1.04%-0.98% Polk-1.909-1.885Polk-0.78%-0.75% Sarasota-0.836-0.780Sarasota-0.39%-0.36% Tampa Bay-101.798-99.239Tampa Bay-4.77%-4.58% Table 3 reports the economic contribution of Hillsborough County’s Development Industry Cluster to Tampa Bay as measured by output. Firms, based in Hillsborough County, of the Development Industry Cluster annually contribute more than $10 billion of economic activity in Tampa Bay. And, $9.3 billion of that economic activity takes place in the County. The Development Industry firms in Hillsborough County contribute about 15% of the total annual output in the county.

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4 4Table 3 Hillsborough County Development Industry Cluster REMI Counter-factual Removal Primary Industries: Construction Major Industry Groups plus Subdividers and Developers (SIC 6552) and Nonresidential Building Operators (SIC 6512) OUTPUT Panel APanel B Total Output (Bil. 01$)Total Output (Bil. 01$) before Removalafter Removal Location20022003Location20022003 Hernando2.6782.764Hernando2.6482.738 Hillsborough61.82464.024Hillsborough52.51154.825 Manatee12.01312.428Manatee11.94612.366 Pasco6.7706.953Pasco6.6476.831 Pinellas46.06247.608Pinellas45.57047.135 Polk19.75720.388Polk19.57720.217 Sarasota14.88115.325Sarasota14.81315.262 Tampa Bay163.985169.491Tampa Bay153.713159.373 Panel CPanel D Difference in Output (Bil 01$)Difference in Output (% change) after Removalafter Removal Location20022003Location20022003 Hernando-0.030-0.027Hernando-1.11%-0.96% Hillsborough-9.313-9.200Hillsborough-15.06%-14.37% Manatee-0.066-0.062Manatee-0.55%-0.50% Pasco-0.123-0.123Pasco-1.81%-1.76% Pinellas-0.493-0.474Pinellas-1.07%-1.00% Polk-0.180-0.171Polk-0.91%-0.84% Sarasota-0.067-0.063Sarasota-0.45%-0.41% Tampa Bay-10.272-10.119Tampa Bay-6.26%-5.97% Table 4 reports the economic contribution of Hillsborough County’s Development Industry Cluster to Tampa Bay as measured by personal income (labor and property income). Firms of the Development Industry Cluster in Hillsborough County contribute over $4 billion of personal income to the workers and owners of capital in Tampa Bay. Residents of Hillsborough County receive about $3.9 billion of this income. Development Industry derived income represents about 13.7% of personal income received in Hillsborough County.

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5 5Table 4 Hillsborough County Development Industry Cluster REMI Counter-factual Removal Primary Industries: Construction Major Industry Groups plus Subdividers and Developers (SIC 6552) and Nonresidential Building Operators (SIC 6512) PERSONAL INCOME Panel APanel B Total Labor & Property Inc. (Bil. nominal)Total Labor & Property Inc. (Bil. nominal) before Removalafter Removal Location20022003Location20022003 Hernando1.1201.182Hernando1.1031.163 Hillsborough28.46930.165Hillsborough24.56925.995 Manatee4.5414.772Manatee4.5104.739 Pasco2.7592.891Pasco2.6862.809 Pinellas19.49120.441Pinellas19.19520.123 Polk7.7548.156Polk7.6728.066 Sarasota6.3376.667Sarasota6.3026.630 Tampa Bay70.47174.274Tampa Bay66.03769.525 Panel CPanel D Difference in Labor & Prop. Inc. (Bil nominal)Difference in Labor & Prop. Inc. (% change) after Removalafter Removal Location20022003Location20022003 Hernando-0.017-0.019Hernando-1.52%-1.61% Hillsborough-3.900-4.170Hillsborough-13.70%-13.82% Manatee-0.031-0.033Manatee-0.68%-0.69% Pasco-0.073-0.082Pasco-2.65%-2.84% Pinellas-0.296-0.318Pinellas-1.52%-1.56% Polk-0.082-0.090Polk-1.06%-1.10% Sarasota-0.035-0.037Sarasota-0.55%-0.55% Tampa Bay-4.434-4.749Tampa Bay-6.29%-6.39% After quantifying the economic contribution of all of the primary industries of the Development Industry Cluster in Hillsborough County, we build a new baseline to use with a “what if” simulation of a slowdown of development-driven economic activity in the County. A new baseline is needed because the slowdown scenario does not include all of the primary industries of the cluster. The slowdown scenario is an assumed restriction on issuance of new residential and commercial building permits in Hillsborough County. Thus, we do not include the following four primary industries from the Development Industry Cluster as defined in the basic study. Highway & Street Construction (SIC 1611) Bridge, Tunnel, & Elevated Highway (SIC 1622) Water, Sewer, Pipeline & Communications Construction (SIC 1623)

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6 6 Nonresidential Building Operators (SIC 6512). We want to quantify the baseline for the slowdown scenario. To effectively do so we consider the assumptions of the simulation. The assumptions are: 1. The slowdown is due to a restriction on issuance of new residential and commercial building permits in Hillsborough County. 2. The restriction on residential building permits includes undeveloped land as well as new subdivisions currently under review for development. 3. The full effect of the slowdown will take place within six months after imposition of the restriction on building permits. The restriction is imposed in mid-2002. The restriction is lifted at the end of 2003. 4. No substitute economic activity occurs in other Tampa Bay counties following Hillsborough’s restriction. 5. No substitute economic activity by remodeling or rebuilding of existing structures occurs following Hillsborough’s restriction. Assumptions 1 and 2 set the scenario for the “what if” simulation. Assumption 3 fixes the timing of the economic shock caused by the restriction on building permits. Assumptions 4 and 5 are used to provide objectivity for the analysis. For example, if substitution of remodeling or rebuilding activity for new construction were allowed, then we must subjectively decide the percentage of restricted, new construction that is substituted for by remodeling or rebuilding. The results of the new baseline estimation and the “what if” simulation should be understood within the context of the above assumptions. We use employment data to apportion economic activity among the construction industries. We assign a 0% attribute to the three excluded construction industries because they are not constrained by the assumed moratorium on residential and commercial building permits. And, we assign a 100% attribute to the rest of the construction industries, because we assume that no substitute activities will occur. Table 5 shows the results of our apportionment of the construction industries. We weight the apportionment according to the number of employees in each industry. As a result, we estimate that 89.07% of the economic activity of the construction industries in Hillsborough County will cease. (By assumption 4, above, we expect the cessation of activities to happen gradually until the 89.07% reduction is reached about six months after the imposition of a slowdown.)

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7 7Table 5 Apportionment of Construction Industries SICDescriptionEmployment Weight by # of EmployeesAssumed % Attributed to new Residential, Commercial, & Industrial ConstructionWeight x % Attrib 1521Single Family Housing 3,034 0.5957100%0.5957 1522Other Residential Construction 47 0.0093100%0.0093 1531Operative Builders 77 0.0152100%0.0152 1541Industrial Buildings 371 0.0729100%0.0729 1542Other Non-res. Construction 1,564 0.3070100%0.3070 TotalGeneral Building Contractors 5,094 1.00001.0000 1611Highway & Street Construction 1,343 0.30250%0.0000 1622Bridge, T unnel, & Elevated Highway 307 0.06920%0.0000 1623Water, Sewer, Pipeline & Communications Construction1,578 0.35550%0.0000 1629Heavy Construction NEC 1,211 0.2728100%0.2728 TotalHeavy Construction 4,439 1.00000.2728 1711Plumbing, Heating & Air Conditioning 3,690 0.1844100%0.1844 1721Painting & Paper Hanging 1,138 0.0569100%0.0569 1731Electrical Work 4,246 0.2122100%0.2122 1741Masonry, Stone Setting, & Other Stone Work 918 0.0459100%0.0459 1742Plastering, Drywall, Acoustical & Insulation Work1,752 0.0876100%0.0876 1743Terrazzo, Tile, Marble, & Mosaic Work 218 0.0109100%0.0109 1751Carpentry Work 911 0.0455100%0.0455 1752Floor Laying and Other Floor Work NEC 240 0.0120100%0.0120 1761Roofing, Siding, & Sheet Metal Work 1,259 0.0629100%0.0629 1771Concrete Work 1,710 0.0855100%0.0855 1781Water Well Drilling 166 0.0083100%0.0083 1791Structural Steel Erection 294 0.0147100%0.0147 1793Glass & Glazing Work 314 0.0157100%0.0157 1794Excavation Work 602 0.0301100%0.0301 1795Wrecking & Demolition Work 393 0.0196100%0.0196 1796Installation or Erection of Building Equipment NEC420 0.0210100%0.0210 1799Special Trade Contractors NEC 1,735 0.0867100%0.0867 TotalSpecial Trade Contractors 20,006 1.00001.0000 15xxGeneral Building Contractors5,0940.1724100.00%0.1724 16xxHeavy Construction4,4390.150327.28%0.0410 17xxSpecial Trade Contractors20,0060.6773100.00%0.6773 TotalConstruction Industries29,5391.00000.8907 Source: Bureau of Labor Statistics Covered Employment and Wages data (also called ES-202data) as reported by the Florida Agency for Workforce Innovation for 2nd quarter 2001.

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8 8 Furthermore, in the basic study (page 14) we previously estimated that Subdividers and Developers (SIC 6552) account for 16.84% of the economic activity of the Real Estate major industry group. Thus, in the “what if” simulation we reduce construction activity in Hillsborough County by 89.07% and real estate activity in Hillsborough County by 16.84% in order to estimate the economic impact of a restriction on the issuance of new residential and commercial building permits. Table 6 shows the baseline estimates. There are nearly 40,000 jobs in the reduced-size Development Industry Cluster in Hillsborough County. These jobs account for about 5.1% of all jobs in the County. The workers in these jobs produce almost $4.5 billion of output annually. This output is about 7% of all goods and services produced in Hillsborough County each year.Table 6 Hillsborough County Development Industry Cluster(-) REMI Baseline Primary Industries: Construction Major Industry Groups less Highway & Street Construction (SIC 1611) Bridge, Tunnel, & Elevated Highway (SIC 1622) Water, Sewer, Pipeline & Communications Contruction (SIC 1623) plus Subdividers and Developers (SIC 6552) EMPLOYMENT (000s) 20022003 Total County Employment783.506798.732 Cluster(-) Employment39.98140.082 Cluster(-) Employment as % of County Employment5.10%5.02% OUTPUT (Bil. 01$) 20022003 Total County Outout61.82464.024 Cluster(-) Output4.4064.488 Cluster(-) Output as % of County Output7.13%7.01% Next, for the “what if” simulation we use the REMITM model to virtually remove the output of the reduced-size Development Industry Cluster in Hillsborough County. The model tabulates the direct effects of the removal as well as the ripple, or secondary, effects throughout the Tampa Bay economy. Employment, output and personal income measure the economic impact. Table 7 reports the expected economic impact, measured by employment, to the Tampa Bay economy due to the assumed restriction on issuance of new residential and commercial building permits in Hillsborough County. Almost 85,000 people working in Tampa Bay are expected to lose their

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9 9 jobs within six months after the restriction is imposed. About 75,000 of those jobs would be lost by people working in Hillsborough County. That is, nearly one out of ten workers in Hillsborough County would be affected.Table 7 Hillsborough County Development Industry Cluster(-) REMI Counter-factual Removal Primary Industries: Construction Major Industry Groups less Highway & Street Construction (SIC 1611) Bridge, Tunnel, & Elevated Highway (SIC 1612) Water, Sewer, Pipeline & Communications Constructipon (SIC 1623) plus Subdividers and Developers (SIC 6552) EMPLOYMENT Panel APanel B Total Employment (000s)Total Employment (000s) before Removalafter Removal Location20022003Location20022003 Hernando43.85244.595Hernando43.51744.263 Hillsborough783.506798.732Hillsborough708.758725.838 Manatee159.296162.159Manatee158.631161.529 Pasco105.737107.122Pasco104.187105.528 Pinellas580.113586.852Pinellas575.057582.013 Polk245.968250.046Polk244.356248.453 Sarasota215.068218.125Sarasota214.367217.470 Tampa Bay2133.5402167.631Tampa Bay2048.8732085.094 Panel CPanel D Difference in Employment (000s)Difference in Employment (% change) after Removalafter Removal Location20022003Location20022003 Hernando-0.335-0.332Hernando-0.76%-0.74% Hillsborough-74.748-72.894Hillsborough-9.54%-9.13% Manatee-0.665-0.630Manatee-0.42%-0.39% Pasco-1.550-1.594Pasco-1.47%-1.49% Pinellas-5.056-4.839Pinellas-0.87%-0.82% Polk-1.612-1.593Polk-0.66%-0.64% Sarasota-0.701-0.655Sarasota-0.33%-0.30% Tampa Bay-84.667-82.537Tampa Bay-3.97%-3.81% Table 8 reports the expected economic impact of the assumed restriction as measured by output. Following assumption 3, we expect that only one-quarter of annual output would be lost in 2002. In 2002, just over $2 billion of output would be lost; about $1.8 billion of the $2 billion would be lost output for goods and services usually produced in Hillsborough County. In 2003, we value the full year’s expected decline in output at $7.9 billion for Tampa Bay of which $7.1 billion would be for goods and services usually produced in Hillsborough County. As a

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10 10 percentage, Hillsborough County’s decrease in economic activity is expected to be 2.93% in 2002 and 11.14% in 2003.Table 8 Hillsborough County Development Industry Cluster(-) REMI Counter-factual Removal Primary Industries: Construction Major Industry Groups less Highway & Street Construction (SIC 1611) Bridge, Tunnel, & Elevated Highway (SIC 1612) Water, Sewer, Pipeline & Communications Constructipon (SIC 1623) plus Subdividers and Developers (SIC 6552) OUTPUT Panel APanel B Total Output (Bil. 01$)Total Output (Bil. 01$) before Removalafter Removal Location20022003Location20022003 Hernando2.6782.764Hernando2.6722.741 Hillsborough61.82464.024Hillsborough60.01356.893 Manatee12.01312.428Manatee11.99912.375 Pasco6.7706.953Pasco6.7456.849 Pinellas46.06247.608Pinellas45.95947.211 Polk19.75720.388Polk19.71920.241 Sarasota14.88115.325Sarasota14.86715.271 Tampa Bay163.985169.491Tampa Bay161.973161.581 Panel CPanel D Difference in Output (Bil 01$)Difference in Output (% change) after Removalafter Removal Location20022003Location20022003 Hernando-0.006-0.024Hernando-0.23%-0.86% Hillsborough-1.811-7.131Hillsborough-2.93%-11.14% Manatee-0.014-0.052Manatee-0.12%-0.42% Pasco-0.025-0.104Pasco-0.36%-1.50% Pinellas-0.104-0.397Pinellas-0.23%-0.83% Polk-0.038-0.147Polk-0.19%-0.72% Sarasota-0.014-0.054Sarasota-0.09%-0.35% Tampa Bay-2.012-7.910Tampa Bay-1.23%-4.67% Table 9 reports the expected economic impact of the assumed restriction as measured by personal income (labor and property income). Following assumption 3, we expect that only onequarter of annual income would be lost in 2002. In 2002, the residents of Tampa Bay would be expected to lose about $935 million of labor and property income. Residents of Hillsborough would lose about $823 million out of the total Tampa Bay loss of income of $935 million. In 2003, the expected decline in personal income is estimated at slightly over $4 billion for Tampa Bay residents. For Hillsborough County’s residents the anticipated loss in 2003 is just over $3.5

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11 11 billion. As a percentage, the County residents’ decrease in personal income is 2.89% in 2002 and 11.69% in 2003.Table 9 Hillsborough County Development Industry Cluster(-) REMI Counter-factual Removal Primary Industries: Construction Major Industry Groups less Highway & Street Construction (SIC 1611) Bridge, Tunnel, & Elevated Highway (SIC 1612) Water, Sewer, Pipeline & Communications Constructipon (SIC 1623) plus Subdividers and Developers (SIC 6552) PERSONAL INCOME Panel APanel B Total Labor & Property Inc. (Bil. nominal)Total Labor & Property Inc. (Bil. nominal) before Removalafter Removal Location20022003Location20022003 Hernando1.1201.182Hernando1.1171.167 Hillsborough28.46930.165Hillsborough27.64726.640 Manatee4.5414.772Manatee4.5354.745 Pasco2.7592.891Pasco2.7442.821 Pinellas19.49120.441Pinellas19.42920.173 Polk7.7548.156Polk7.7378.080 Sarasota6.3376.667Sarasota6.3296.636 Tampa Bay70.47174.274Tampa Bay69.53670.261 Panel CPanel D Difference in Labor & Prop. Inc. (Bil nominal)Difference in Labor & Prop. Inc. (% change) after Removalafter Removal Location20022003Location20022003 Hernando-0.003-0.015Hernando-0.31%-1.31% Hillsborough-0.823-3.525Hillsborough-2.89%-11.69% Manatee-0.006-0.027Manatee-0.14%-0.57% Pasco-0.015-0.070Pasco-0.56%-2.42% Pinellas-0.062-0.268Pinellas-0.32%-1.31% Polk-0.017-0.076Polk-0.22%-0.93% Sarasota-0.008-0.031Sarasota-0.12%-0.47% Tampa Bay-0.935-4.013Tampa Bay-1.33%-5.40% Table 10 depicts economic migration. Economic migrants are persons under age 65, who were part of the civilian population of the U.S. the preceding year, and who respond to economic and / or amenity factors by moving into or out of a region. Panel A shows anticipated yearly economic net migration for each county and a summation for Tampa Bay. Panel B shows anticipated net economic migration after the imposition of a restriction on building permits. Panel C quantifies the difference in net economic migration before and after the restriction.

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12 12 Following assumption 3, there is only a half-year impact in 2002. Panel D shows the difference in net economic migration as a percentage of the anticipated net migration in Panel A.Table 10 Hillsborough County Development Industry Cluster(-) REMI Counter-factual Removal Primary Industries: Construction Major Industry Groups less Highway & Street Construction (SIC 1611) Bridge, Tunnel, & Elevated Highway (SIC 1612) Water, Sewer, Pipeline & Communications Constructipon (SIC 1623) plus Subdividers and Developers (SIC 6552) NET ECONOMIC MIGRATION Panel APanel B Net Economic Migrants (000s)Net Economic Migrants (000s) before Removalafter Removal Location20022003Location20022003 Hernando2.8802.772Hernando2.6992.336 Hillsborough20.32819.047Hillsborough13.4832.197 Manatee6.8696.264Manatee6.7235.910 Pasco8.4177.622Pasco7.4295.222 Pinellas16.97915.510Pinellas15.65212.321 Polk9.4708.776Polk9.0857.818 Sarasota9.4778.754Sarasota9.1938.411 Tampa Bay74.42068.745Tampa Bay64.26344.215 Panel CPanel D Differernce in Net Economic Migrants (000s)Difference in Net Economic Migrants after Removal(% change) after Removal Location20022003Location20022003 Hernando-0.181-0.436Hernando-6.27%-15.72% Hillsborough-6.845-16.850Hillsborough-33.67%-88.47% Manatee-0.146-0.354Manatee-2.12%-5.65% Pasco-0.989-2.400Pasco-11.74%-31.49% Pinellas-1.327-3.189Pinellas-7.82%-20.56% Polk-0.385-0.958Polk-4.07%-10.91% Sarasota-0.284-0.343Sarasota-3.00%-3.92% Tampa Bay-10.157-24.530Tampa Bay-13.65%-35.68% In Panels C and D, Table 10, we report an estimated 10,000-person (13.65%) drop in net economic migration to Tampa Bay in 2002. In 2003 we expected the decline to be 24,500 (35.68%) economic migrants. For Hillsborough County, the expected decrease in economic migrants is 6,800 persons (33.67%) in 2002 and 16,850 persons (88.47%) in 2003. Although, we expect a decrease in net economic migration from the baseline, net economic migration is still expected to be positive. For example, from Panel B, Table 10, note that there is an anticipated net gain of 2,197 economic migrants into Hillsborough in 2003.

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13 13 Table 11 depicts net migration whether motivated by economic factors or otherwise. Panel A shows anticipated yearly net migration for each county and a summation for Tampa Bay before the imposition of a restriction on building permits. Panel B shows anticipated net migration after the imposition of a restriction on building permits. Panel C quantifies the difference in net migration before and after the restriction. Following assumption 3, there is only a half-year impact in 2002. Panel D shows the difference in net migration as a percentage of the anticipated net migration in Panel A.Table 11 Hillsborough County Development Industry Cluster(-) REMI Counter-factual Removal Primary Industries: Construction Major Industry Groups less Highway & Street Construction (SIC 1611) Bridge, Tunnel, & Elevated Highway (SIC 1612) Water, Sewer, Pipeline & Communications Constructipon (SIC 1623) plus Subdividers and Developers (SIC 6552) NET MIGRATION Panel APanel B Net Migrants (000s)Net Migrants (000s) before Removalafter Removal Location20022003Location20022003 Hernando3.4633.342Hernando3.2822.906 Hillsborough25.74624.357Hillsborough18.9017.507 Manatee7.8047.181Manatee7.6586.827 Pasco8.3227.508Pasco7.3345.108 Pinellas17.55816.047Pinellas16.23112.858 Polk11.42910.706Polk11.0449.748 Sarasota10.5559.804Sarasota10.4139.461 Tampa Bay84.87778.945Tampa Bay74.86354.416 Panel CPanel D Difference in Net Migrants (000s)Difference in Net Migrants (% change) after Removalafter Removal Location20022003Location20022003 Hernando-0.181-0.436Hernando-5.22%-13.04% Hillsborough-6.845-16.850Hillsborough-26.59%-69.18% Manatee-0.146-0.354Manatee-1.87%-4.93% Pasco-0.989-2.400Pasco-11.88%-31.97% Pinellas-1.327-3.189Pinellas-7.56%-19.87% Polk-0.385-0.958Polk-3.37%-8.95% Sarasota-0.142-0.343Sarasota-1.35%-3.50% Tampa Bay-10.015-24.530Tampa Bay-11.80%-31.07% In Panels C and D, Table 11, we report an estimated 10,000-person (11.80%) drop in netmigration to Tampa Bay in 2002. In 2003 we expect the decline to be 24,500 (31.07%) migrants.

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14 14 For Hillsborough County, the expected decrease of migrants is 6,800 persons (26.59%) in 2002 and 16,850 persons (69.18%) in 2003. Although, we expect a decrease in net migration from the baseline, net migration is still expected to be positive. For example, from Panel B, Table 11, note that there is an anticipated net gain of 7,500 migrants into Hillsborough in 2003. Comparing Tables 10 and 11, we conclude that the expected decrease in net migration is almost entirely due to an expected decrease in net economic migration. That is, after the imposition of the restriction on building permits the relative employment opportunity declines in Tampa Bay and particularly in Hillsborough County. Fewer working age persons in-migrate and more out-migrate. However, other-than economic migrants, such as retirees, continue to come to Tampa Bay in approximately the same numbers as before the restriction. In summary, we estimate the following economic impacts for Hillsborough County due to a shock to the economy by a restriction on issuance of new building permits in the County. About six months after the slowdown in development activity, approximately 75,000 jobs would be lost by people working in Hillsborough County. These lost jobs equate to a decline of $1.8 billion of output of goods and services usually produced in Hillsborough County. And, the residents of Hillsborough County lose $823 million of personal income. With the restriction presumed to last throughout the year 2003, the losses of output and income in Hillsborough County mount. There are also economic impacts that are expected to spillover into other counties in the Tampa Bay region.