Actions the County Can Take to Reduce the Threat of Future Rate Increases
Edward Cornet, PhD
February 2015
The year 2013 was a shock for Currituck County taxpayers. The County property tax rate was increased by more than 50% and tax bills for mainland property owners grew by more than 20%. The reason for the tax hike was the severe decline in property values in the Currituck Outer Banks (COBX) that dropped at a rate three times the national average. In this paper, and in supporting analysis based on public data, I show that the root causes of the COBX value decline are fundamental, persistent and likely to get worse. Unless something is done, mainland taxpayers will face continued tax increases to maintain their quality of service in the coming decades. Fortunately, there are actions that Currituck County can take to stop the COBX value decline and, in fact, reverse the trend. Even with the current reduced tax base these actions are currently within the economic power of the County, but may not be in the future if COBX values continue to slip. Turning this situation around will require County government to have a long-term strategic vision, a realistic action plan, and the political will to execute a feasible multi-year plan beginning now.
The multi-year plan should have three key action items:
- Tighten building and rental regulations to limit density per developed acre.
- Re-build Corolla beaches within ten years and the Northern Beaches thereafter.
- Invest in the minimal infrastructure to capture the value of the Northern Beaches.
The detailed planning and initial actions for these programs need to be started now while the County can afford the initial investments. Acting now will assure outside investors, thereby increasing demand for COBX property, raising the tax base before the next valuation. Completion of the programs could swing projected tax revenues by $15-20M per year.
Detailed explanations of the tax base threats and opportunities, as well as proposed remediation plans, estimated costs and estimated returns on investment, are discussed at length.
The Currituck Outer Banks (COBX)
The Currituck Outer Banks is a 23 mile long strip of land averaging just a bit over a mile in width. COBX is a sandy barrier peninsula separated from mainland Currituck County by the Currituck Sound. COBX contributes more than half of all County tax revenues from just 12% of the total land area of the County. The area is home to less than 5% of Currituck registered voters. More than 90% of the COBX property value is owned by entities that do not reside in Currituck County. The northern and southern halves of COBX have similar natural features, but major differences in development.
The southern half of COBX is known as Corolla and has about 7,000 total acres of land. About 2,100 acres have been platted for development (approximately 3.4 square miles) with almost 5,000 reserved for conservation purposes. Corolla has paved roads and a County water utility. Some subdivisions are served by County managed sewer systems. About 80% of the platted parcels have already been developed.
The northern half of COBX is the Northern Beach. This includes thirteen named subdivisions including Carova, Swan Beach and others. The total area is about 8,600 acres, somewhat larger than Corolla. As in Corolla, about 2,100 acres have been platted for development, about the same as Corolla. About 6,500 acres has been left for conservation purposes somewhat more than Corolla. The area is accessible only by four wheel drive vehicles that must traverse the beach to travel up the peninsula and then across inland sand roads. There are no public water or sewage treatment facilities. Only 22% of Northern Beach platted parcels have been developed to date.
Economic Importance of the Currituck Outer Banks (COBX)
COBX is an important east coast summer vacation attraction. The winter resident population of less than a thousand swells to over 60,000 during the summer months of which an estimated 55,000 are hosted in Corolla. COBX homes have been attractive investments for outside capital. Summer rental incomes partially offset costs of 2ndhome ownership and property value appreciation was anticipated. As a result property values increased steadily, as documented by the County’s 2005 valuations. Thus, although COBX is only 12% of the Currituck County land area, it generated more than half of the County’s property tax revenues. COBX also generates County revenues through Occupancy and Sales taxes that together with Real Estate taxes contributed over $28 M in 2012, an estimated 3/4 of all County revenues.
The COBX real estate, sales and occupancy taxes, more than 90% of which are paid by non-County residents, are a boon to mainland residents allowing them to have high quality County services with a low tax rate. As COBX property values rose beginning in the 1990’s Currituck residents enjoyed improved County services while retaining low tax rates. The flip side of this coin is that when COBX property values declined the tax burden disproportionally shifted to the mainland.
The economic importance of COBX was emphasized during the 2013 tax re-valuation of property in the County. Mainland property values declined at about the national average rate due to the nation-wide economic slowdown. However, COBX property values declined at least three times faster. To maintain services the County was forced to raise the tax rate dramatically. As a result mainland property owners saw their tax bills go up by about 20% for the same level of service. They had to pay an estimated $3 M per year more to make up for lost tax revenues from COBX. If the threats that eroded COBX property values cannot be reversed, the mainland will face another tax hike after the next re-valuation.
Currituck County government needs to recognize and combat the threats and understand and capture potential opportunities to recover COBX value.
Key Factors Controlling COBX Value
Property values in COBX are driven by the rental income potential of vacation homes. Rental income potential, in turn, is driven by the peak rental rates that can be supported, and by the total number of weeks per year when the area is attractive to vacationers. The more attractive an area the higher the rents that can be charged while still maintaining high capacity.
The County Tourism department has gathered data to understand the features that vacationers like and dislike about their COBX experiences. In COBX the chief attractions are our uncrowded beaches, our natural scenery and a relaxing/ peaceful family-oriented atmosphere. The chief dislikes are the increased crowds on the beaches and the increased traffic on the roads.
In the past twenty years development has doubled the number of housing units in Corolla. An analysis using occupancy tax data (that corrects for rate hikes, inflation and new construction) shows that even though total occupancy tax receipts have risen, the average rental rate per bedroom has stagnated. Investors understand this and are beginning to look elsewhere. This is one factor why COBX property values have declined recently much faster than the national average.
Threats to COBX Value
There are two major threats to COBX economic value, over development and beach erosion, both of which contribute to an increase in crowding of roads, commercial areas and beaches.
Over-Development
The summer resident population in Corolla, swelled by vacationers, is about 55,000. An additional 5,000 come from the Northern Beaches to use the Corolla Commercial areas. The summer resident population density is over 16,000 people per square mile and would rank Corolla in the top 25 most densely crowded cities in the US. Vacationers already point to over-crowding as a chief dislike, and there is room for it to get significantly worse if not managed well. There are three factors that contribute to crowding:
· New development of the 20% of remaining platted lots,
· remodeling and expansion of existing homes to increase the number of bedrooms, and
· use of vacation homes by more than the occupancy permit capacity
New Development- Real estate development follows rational economic logic aimed to maximize short-term returns for capital investment. For COBX this means, squeeze in as many rental bedrooms as you can, consistent with the market demand, in order to increase your return on your investment in the property. This development logic has fueled three trends that, if left unchecked, will further increase summer population density well above the current level:
· In single family areas the trend is to increase the number of bedrooms per home well above the current average, with some larger than 20 bedrooms.
· In areas that permit development of high density housing; smaller, less expensive homes are built with perhaps only four bedrooms per house, but with many more bedrooms per acre than the current average.
· Some commercially zoned real estate is used for residential housing further increasing the summer population.
The 80% of already developed property in Corolla averages about six bedrooms per house and 12-15 bedrooms per acre. If the remainder of this area is developed, but restricted to the current density, then the future will bring an increase in traffic and beach crowding by 25%. However, about a third of new homes built in recent years were averaging 10 bedrooms. If this trend is allowed to continue crowding will increase by 40%. This also will result in a requirement to increase County capital investment by a similar percentage to provide additional public parking, water and sewer capacity.[1]
Remodeling Existing Homes- There is also a trend toward adding bedrooms to existing homes to extract more rental income. In the most extreme case older, smaller homes are torn down to erect rental homes with many more bedrooms. Some subdivisions have covenant restrictions to limit the maximum number of bedrooms, but many do not. If this trend raises the average only by 2 bedrooms per home this factor alone will lead to an additional 35% increase in crowding and County investment.
Vacation Renter House Stuffing- There is a trend for vacation renters to use homes, in many cases, well above the listed rental capacity. Homes have septic and sewer system capacities designed around a nominal two persons per bedroom that should be the maximum capacity for rent. But there are no County regulations addressing this. In one case this past summer, a home listed with eight bedrooms was housing 34 guests for the week. This was more than twice the capacity of the septic system, twice the wear and tear on the home, twice the load on County water, and twice the traffic and beach crowding.
Even though Corolla is already 80% developed these three factors over the next decade could increase the summer population density to 20,000 people per square mile moving Corolla into the top 10 most crowded category. This will make the area much less attractive to our core vacation market segment and lead to further decline in property values. There may be a modest, short term increase in rental taxes, but these will be more than offset by the continued decline in real estate tax revenues following the next revaluation. The combined effect is estimated to be an additional $3 -$5 million dollar per year loss in tax revenues.
Beach Erosion
Beach erosion is a force of nature that affects all ocean side communities. The forces of winds, tides and storms push the sand to the west. The dune line recedes, the dry sand portion of the beach shrinks, and walkways and houses are eventually under-mined. Erosion rates along all the Outer Banks has been studied for decades by Federal and State authorities. The US Army Corps of Engineers reports that, in COBX, the beach has shrunk at a rate between 2 to 6 feet per year for the past 30 years with the same rate expected for the foreseeable future.
I will define the capacity of a beach for vacationers as proportional to the width of the beach from the toe of the dune to the high tide line. I’ll call this the “dry sand” beach. A dry sand beach area that may be 100 feet wide today at high tide will be reduced to between 40 and 80 feet wide in ten years at current erosion rates. Less dry sand beach means more beach crowding, even if the number of vacationers does not increase.
Crowded beaches reduce attractiveness to vacationers. Rental rates must be reduced to maintain occupancy. In older towns like Kill Devil Hills and Nags Head, the beaches had shrunk to the point by 2011 that oceanfront rental rates per bedroom were only about 60% of those for comparable homes in Corolla. Declining rental rates led to declining property values. As the value of vacation rental properties declined the tax burdens shifted towards the sound-side permanent residents in these communities.
An even more dramatic negative impact is seen in communities like Kitty Hawk, South Nags Head and the COBX northern beaches, where beach erosion finally undermined ocean front homes and made the lots unbuildable. In these cases what were once the highest valued properties, oceanfront homes, were lost from the tax rolls. In addition, the broken pilings and debris from the undermined homes made the narrower beachfront even less attractive to the renters of non-oceanfront properties. This is a major reason why vacation rental rates and property values in these areas are significantly less than an equivalent in Corolla.
If Corolla rentals and property values face a similar decline due to continued beach erosion, the County would lose an additional $5 to $8M per year in tax revenues. This is revenue that the mainland tax payers would have to pay to maintain current services.
Finally, as the beach narrows, homes become more vulnerable to storm flooding from major storms that can damage property quickly. When this occurs during peak season there is an immediate loss of rental income. In the worst case a house is lost and cannot be rebuilt. Once this occurs the bad experiences of vacationers are communicated swiftly, creating a drop in occupancy and property values that can take years to recover, even after the debris has been cleared and the beaches and homes repaired.
Combined Effect
Over the past eight years, since the 2005 property valuation, the combination of new construction and an increase in the number of bedrooms per house has increased traffic on our roads and in our stores by more than 35%. Crowding on our beaches has felt even greater since erosion has reduced the beach area available. The current summer population density has become higher than in some big cities. No wonder property values declined at three times the national average over this period. Real rental income and occupancy tax collections per bedroom have stagnated and begun to decline. Outside investors are becoming wary. The 2013 County revaluation showed that COBX property values declined by more than $2.5 Billion, costing the County more than $3 million in tax revenues and forcing mainland tax bills to rise to cover the loss.
The combination of new development, remodel expansion, and house stuffing could raise the summer population to over 70,000 in the next ten years. Beach erosion will compound this effect making our beaches seem three to four times more crowded. If this occurs rental rates will have to drop in order to maintain occupancy rates and with a drop in rental income the property values will decline as well. Declining property values discourage outside capital investment. And, most importantly, the County tax burden will continue to shift toward mainland property owners. At the same time the County’s investment costs will rise to construct and manage more infrastructure to support the summer population.
These effects threaten to cause the County a net loss of an additional $4M to $5M per year in tax revenues during the next decade if not addressed. This is revenue that mainland tax payers would have to contribute to maintain current services.
Opportunity to Increase COBX Value
There are still opportunities for Currituck County to significantly grow its tax base in COBX with the right actions and the right investments. As noted above the northern half of COBX, our Northern Beaches area, has about the same area of land platted for development as Corolla. But this area has only been 23% developed to date. Rental rates and property values in the Northern Beaches are only about a third of those in Corolla. Property values declined there by 55% over the past eight years as investors fled. As a result the Northern Beaches contributed only about 10% of the total of COBX tax revenues to the County.
The two major reasons for this decline in value are:
· the area is inaccessible except for four-wheel drive vehicles which greatly limits the vacationer market, and
· the number one attraction for vacationers, the beach, is much less attractive than Corolla, and much less safe for families, because it is crowded with vehicles using it as a highway and parking lot.
If the County can remove vehicle traffic from the beach to restore its recreational value and solve the access problem for passenger cars to our Northern Beaches, then the value increase to the County and its tax payers will be significant. At the same time this will improve public safety for beach goers and residents alike.
When the area was subdivided decades ago the County did not exercise its leverage to require developers to pave the streets in the area. Nor was there a requirement for paved road access to be established as an extension of State highway NC 12 that runs through Corolla. Today there are more than six miles of 100 feet wide platted north-south right-of-way called Ocean Pearl that runs through most of the platted subdivisions. This is a sand road today, but badly in need of maintenance. There is also about one mile of privately owned plats to be traversed for a completed connection. Depending on the path through these there might be between 26 and 39 plats affected. Based on a review of Deed and Plat records most of these plats already have easements for utilities and Ocean Pearl. Lastly, there are three state or Federal tracts ocean-to-sound totaling over three miles in length where easements exists, but permission would need to be gained for a roadway. This was done in the past for similar conservation areas on Hatteras and Ocracoke Islands. Thus, there are complex, but not impossible, challenges to be overcome.
The total cost to pave an eleven mile two-lane asphalt road as an extension of NC12 roughly along the line of the historic Ocean Pearl right-of-way would be in the range $25 to $35 million. The County already has authority under G.S. 153A-301 to set up a special tax district for road maintenance in the area that could be used to clear the right-of-way, establish a gravel road foundation and reduce the cost of eventual paving by the State. Added to this would be County lobbying costs to get approvals at the State and Federal levels, plus the acquisition of some private property or the exercise of existing easements along the right-of-way as required. As an extension of State highway NC12 there would likely be State funding to offset some if not all of the construction costs. So, the big issue for the County is the effort required over several years to take the lead to get the needed approvals.
Once the traffic has been moved off the beach and new construction accelerates the County should consider an investment in a water supply service facility to serve the region similar to SOBWS begun in 2005 in Corolla. Deploying an NOBWS water distribution system infrastructure as part of road right-of-way clearing and grading would provide cost efficiencies. Cost recovery of the County’s initial investment should be planned from tap fees to builders / developers. The County will need to use its regulatory powers to manage development to prevent the over development that has plagued Corolla, by encouraging quality in home construction while keeping the people density reasonable.
The County should also review the impact of growing development here on the already crowded commercial businesses in Corolla and consider how best to serve the Northern Beaches growing needs for groceries, fuel, restaurants, entertainment and retail shopping.
Based on estimates made using current tax data, today our Northern Beaches area contributes less than 10% of the tax revenues of Corolla for the equivalent platted acreage and about the same length of beachfront, even though it has equivalent or greater natural attractiveness. Once the infrastructure improvements are accomplished they might bring development to at least 50% of the lots and increase property values to 60% of those in Corolla within another ten years. The owners of COBX properties would see more than a Billion dollars of appreciation in value of their property. The value appreciation and growing vacation rental business would bring in an additional $10 M per year in additional tax revenues to the County and more than $5 M per year in extra sales tax revenue to the State from rentals. This represents the single biggest economic development opportunity for the County and the highest return on investment of any of these suggested initiatives.
Why Currituck County Needs to Act Now
Today the COBX area is still a strong tax revenue source for the County. The worst negative impacts of the factors noted above will not be felt for five to ten years, but the natural and economic forces that drive them are inevitable if no action is taken. The issues are:
· Promoting quality versus quantity development
· Restoring and maintaining Currituck’s wide beaches
· Unlocking the value of the northern beaches
The County needs time to develop a strategy and a plan to deal with this set of issues. It will take time to build the necessary coalitions, and time to secure the investment capital that may need to be spent. This needs to be done now, if there is to be time to act to reverse these trends. The detailed plan should be developed and funding sources identified with a year. These programs should be expected to show significant progress over the next four years.
If the County can take definitive steps to address these three key issues in the next four years it will signal prospective outside investors that COBX real estate is a safe bet again. Thus, by the time of the next tax re-valuation the COBX values will be on the rise again. Completion of at least the first phase of these programs over the next ten years will secure these tax revenues for the foreseeable future. If the County cannot seriously address these issues, mainland tax payers should gird themselves for another tax hike following the 2021 re-valuation.
Nags Head waited ten years too long to start their beach nourishment project while their rental rates and property values declined more than 30% lower than those in Corolla. Kitty Hawk, like our Northern Beaches, waited until it had already lost a row of oceanfront homes from the tax rolls. Meanwhile their property values declined and market share was lost to other venues, such as Corolla. Now that Nags Head has restored their beaches their rental attractiveness is rising and they will become more competitive with COBX for the vacationer dollar. Other towns to our South have begun beach restoration programs creating more competition. Currituck needs to act before our market decline accelerates, not after we have lost even more of our market and tax revenues to other summer vacation areas.
Key Strategic Elements of an Action Plan
The recent decline in COBX property values and the resulting tax hike should be a wake up call for the County. The golden egg of COBX is beginning to tarnish and there are real threats that eventually will cause it to crack and break if nothing is done. But there are clear steps that the County can take to not only avert an economic collapse, but to once again grow the economic value of its natural resource assets.
Promote quality vs. quantity development– The recent revisions of the UDO have been important to address some issues in new construction and re-modeling, but they still permit much higher density construction than the average today, exacerbating the crowding problem. The Small Area Plans are an important first step to providing advice to builders and developers, but they are not sufficiently constraining. More needs to be done to put teeth in these measures to limit population density without discouraging future quality development. More work also needs to be done to understand the direct costs to County taxpayers for the potential doubling of water and sewer capacity, the indirect costs to owners due to property de-valuation as traffic and beach crowding grow, and the loss of future tax revenues due to this continued value decline.
Owners of undeveloped lots need to be able to build, but not in a way that is going to hurt property values by excess over-crowding. The goal should be to not allow the bedrooms per acre of new development to exceed the current average in Corolla. There should also be constraints placed on the use of commercially zoned acreage for residential housing, as opposed to providing important commercial support services for all of COBX. There also needs to be regulations to ensure that homes are rented only to their approved occupancy capacity.
Restore and maintain Currituck’s wide beaches- The County recognizes that beach nourishment and protection is an issue and has taken its first step by providing a small budget for beach grass plantings. But COBX has 23 miles of beaches, more than twice that of Nags Head. Subsidizing beach plantings and sand fencing are helpful measures that can slow the deterioration of the dunes, but the very small budget for this today does not even begin to reflect the scale of the problem. Programs for cost sharing with oceanfront homeowners to maintain the dune line should be expanded as stop-gap measures. But these do not address the issue of dry sand beach erosion.
The ultimate long-term solution is a large-scale beach nourishment project to restore sand as was done in Nags Head at a cost of about $3.6 M per mile. To maintain a quality beach experience this may need to be re-done every 30-40 years thereafter.
The County needs to immediately develop a comprehensive plan and then begin significant saving now to create a fund to offset the costs for an eventual beach nourishment and to be used in an emergency to recover quickly from a major storm. They should plan on restoring the Corolla beaches, probably in the next ten years, with a second phase ten years later for our Northern Beaches. This would require setting aside funds each year from the occupancy tax revenues starting now, perhaps to be supplemented by other funding measures as was done in Nags Head.
Unlock the Value of the Northern Beaches– The County needs to begin now working with the State and Federal governments to get traffic off the beach, eventually extending NC12 to the Virginia state line. Planning needs to be done to determine the best way to get traffic off the beach even through the conservation areas. There needs to be a review of property deeds and existing easement rights in planning the most cost-effective route through or along the private and publicly owned plats. Consideration needs to be given to protect the natural environment and the wild horses, while at the same time making these natural attractions more accessible through public viewpoints, parking areas and beach access paths.
Perhaps the County should begin to acquire lots near the beach to create public parking for beach-goers, such as was done in Whalehead, south of Spindrift and near the lighthouse in Corolla. A concerted effort needs to be started and maintained for the next five to ten years to achieve this objective and unlock the economic value of this important natural asset for Currituck County.
Return on Investment for Currituck County Tax Payers
In 2013, two-thirds of Currituck County property owners, in areas serving 95% of Currituck registered voters, saw their annual property tax payments increase by an average of 20% as a result of the 40% to 55% decline in property values in COBX. The property tax burden will continue to shift to mainland property owners unless the causal factors of COBX declines are addressed. This paper has identified three important causal factors and outlined the steps and investments the County needs to take to reverse the trend. Although the investments may seem large they are within the financial strength of the County today and they will have significant positive return on investment for Currituck taxpayers as shown below.
Beach Restoration and Managing Growth– Based on the experience in Nags Head, Currituck County will need to invest about $70M over the next twenty years to restore the beaches first in Corolla and then in the Northern Beaches once traffic is re-directed off the beaches. These funds can be raised by re-directing 25% to 30% of current Occupancy taxes each year into a reserve fund for these purposes. The County needs to immediately begin to explore the engineering and regulatory issues. These first concrete steps to address the beach erosion and over crowding issues will send an immediate message to investors that COBX is again a safe vacation rental property investment. As the first phase of the project is completed in Corolla, it can be expected that much of the $10M in annual tax revenues recently lost might be recovered after the next re-valuation. The twenty-year Net Present Value (NPV) of these incremental cash flows at a 10% discount rate for this investment is over $100 million indicating a high-payoff investment opportunity.
Capturing Our Northern Beaches Value– Establishing a two-lane paved road to the Virginia state line requires NC State DOT support and funding. Currituck County, under current State law, has authority to maintain the sand road rights-of-way and perhaps prepare the main right-of-way for eventual paving by DOT. The County with DOT support will have to take the lead in negotiating with State and Federal Wildlife organizations for road right-of-way along the path of the existing utility right-of-way. The County will have to take the lead in working with the private land owners to determine the best path through or along their properties. The sand roads in the subdivisions are all dedicated for public use and can be maintained, under State law, using funds from a special tax district if needed. This will take effort, time and political will, but there is sufficient precedent that it should be possible even if approval takes a few years.
The cost-benefit to the County’s taxpayers is clear as noted above. Compared to the County’s share of road and water supply system construction costs of $35-50 million, the twenty-year NPV of expected tax revenue cash flows to the County due to increased construction, property value appreciation and rentals is over $100 million, a solid investment. The increase in State sales tax revenues alone would provide a twenty-year NPV of over $50 million more than enough to justify it as a high priority NCDOT project. And it is likely that NC DOT budgets can pay for most of the road construction once the political support is gained in Raleigh.
The Bottom Line
The actions suggested above are all solid investments that are within the capacity of Currituck County today. They are good for all property owners in COBX because their rental incomes and property values can begin to rise again. Property owners today and prospective investors will see their value rise by a total of several billion over the next ten years. They are good for Currituck County residents because the additional tax revenues generated will allow them to retain low tax rates while continuing to enjoy quality County services.
Failure to act now will lead to continued property value decline in COBX and continued tax increases for County residents. If nothing is done to reverse these trends and capture the full value potential of COBX, then by 2025 mainland residents can expect their tax bills to increase by an additional $3.5 million per year to offset the continued decline in COBX.
By acting decisively now across all three initiatives the County can capture the full value of COBX for County taxpayers within a decade with continued growth prospects. The County will need to reinvest a portion of COBX tax revenues over the next twenty years to complete all phases of these projects. But the investment returns to County tax payers are high as measured by commercial standards.
Let’s get started.
APPENDIX - COBX Data Sources and Analysis
Geographic Information on areas and land use
Currituck County Planning and Tax Department data
New construction permits by year 1992-2010
Average # bedrooms per house 2011
Bedrooms in new construction 2010 to present
Impact of 2013 tax hike on shift of tax burden
Currituck County GIS Online – measurements and access to
individual parcel ownership and tax information)
Currituck County tax rates by year 2004-2014 from website
Currituck County 2014 Tax Records by Parcel from County website
Excel file: AA502NCCUR-PARCEL
24,276 parcels 48 data fields per parcel record
Conservation Purposes definitions:
- land not platted for development
- land owned by Federal or State entities
County Revenues
County budgets published on County website
Occupancy tax data 2000-2011 provided by tax department
Sales tax data provided by tax department
Sales tax and occupancy tax rates – Sun Realty
NC State Department of Revenues - statewide tax rates by County
- 2004 rate $0.62 about average for NC Counties
- 2005 rate $0.32 lowest 10% of NC Counties
- 2013 rate $0.485 lowest 20% of NC Counties
NC General Statutes
- Occupancy tax authorization statute – GS 153A-155
- County tax service districts - roads – GS 153-300
- Property tax statute –GS 153A-149, … revaluation at least every 8 yrs – 2021 next for Currituck
- County authorization: beach erosion control GS 153A-438
Tourist, Vacationer Preferences /
Currituck County Tourism Department studies 2007, 2011
Currituck County EDAB 2011 Small area planning workshops
2011 Interviews with Corolla Rental Companies in conjunction with EDAB
Review of COBX Rental Company websites – bedrooms, # beds
Review of OBX Rental Company websites – Oceanfront rental rates per
Bedroom
Interviews with COBX Owners of summer rentals
Beach Erosion / Rates
NC Division of Coastal Management
- http://portal.ncdenr.org/web/cm/oceanfront-construction-setback
US Army Corps of Engineers
- http://www.frf.usace.army.mil/
Currituck County Planning: organized CAMA Presentations 2012
Currituck County GIS – 1995 and 2012 aerial views Sandfiddler Road (Oceanfront lots and homes) in Swan Beach
Highway Construction Costs
http://capitolfax.com/summary.pdf $1.7 M per mile 2 lane, 5’ shoulders
https://www.arkansashighways.com/roadway_design_division/Cost_per_Mile_JULY_2009.pdf $1.75 M/ mile two land new construction
Ocean Hill and Monterey Shores repaving projects – 2 inch asphalt overlay on two lane road $300,000 per mile (2012, 2013 oil at $100/barrel
National Housing Prices
"Median and Average Sales Prices of New Homes Sold in United States". Census.gov. Retrieved 2014-02-21.
http://www.zillow.com/home-values/
Analysis and Assumptions of Future COBX Property Values 2015
General Methodology– I used the same return on investment methodology used by the Currituck County Economic Development Advisory Board as developed in 2011 and approved for use by the CC Board in 2012. This model was an adaptation of Commercial investment modeling methodologies generally used in the management consulting industry
Business as Usual Case– assumptions over the next ten years
- Corolla 10% of lots new development 10br density equivalent
- Corolla 20% remodel to 9 br density equivalent
- Rental packing continues at 120% of septic capacity
- Beach erodes to 70% of current width
- Nags Head, KDH and Kitty beach projects completed
- NH, KDH & KH compete more effectively for market share
- Effective rental rates decline 1% per year to maintain occupancy
- Property values decline 1.5 % / yr
Currituck County takes prompt action– assumptions over the next 10 years
- New construction and expansion capped at current avg density
- Corolla nourishment project completed by 2025
- Nags Head, KDH and Kitty beach projects completed
- COBX maintains competitive edge over NH, KDH & KH
- Two lane paved road completed to VA line along historic Ocean Pearl / North-South Road right-of-way
- Northern beach subdivision roads maintained by County and plans for paving over next ten years
- Corolla to 85% development
- Northern beaches to 45% development and 60% of Corolla values
- Property appreciation at 3% per year
[1]The County fronts the capital to build or buy the infrastructure then recovers some of this capital through tap fees and/ or service district taxes.
