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28

While the vacancy rate (Figure 14) has

improved significantly over recent years

(currently between 3 to 7%), the conversion

of employment lands for residential uses

has potentially problematic fiscal

consequences. As shown in Figure 15, on a

per acre basis, new commercial

development brings a much higher level of

revenues to the City of Morgan Hill, even

after accounting for increased costs of

providing services.

Figure 15. Estimated Annual Revenues, Expenditures, and Jobs per Acre by Land Use

Development Type

Land Use

Development Type

Revenues per

Acre

Expenditures

per Acre

Net Revenues

per Acre

Jobs per

Acre

Single Family

$222

$175

$47

N/A

Multifamily

$53

$58

-$5

N/A

Retail

$44,366

$9,239

$35,127

29

Office/R&D/Industrial

$6,050

$1,568

$4,482

26

Hotel*

$43,490

N/A

N/A

10

Notes: Jobs, revenues, and expenditures for single family, multifamily, retail, office/R&D/Industrial are

modeled based on previous fiscal impact studies conducted by Strategic Economics.

*Hotel tax revenues include transient occupancy tax, property tax, and sales tax revenue. Expenditures

were not available.

Sources: HA&A Hotel Market Research, 2015; STR Host Almanac, 2016; HVS Hotel Development Cost

Survey; City of Morgan Hill, 2017; Vallen and Vallen, 2012; Strategic Economics, 2017.