Golf Real Estate
The walkable open spaces and recreational opportunities provided by golf courses make them a key amenity in many residential communities. There are 67 “traditional” master-planned golf residential communities in Colorado. In addition, there are about 23 other golf courses that have some residential component associated with them, such as apartments, villas, lodges or resorts. In total, it is estimated that upwards of 49,000 residential units in Colorado are part of master-planned golf communities or are immediately adjacent to golf courses.
In addition, there are six golf communities in Colorado that were still active in 2019 with new residential construction, adding an estimated 235 new single-family homes, townhouses and condominiums to the market. The ongoing residential construction produces real economic output that is enhanced by the presence of a golf course within the community.
Golf Real Estate Impact
The economic impact of golf real estate in Colorado encompasses two components: (1) Golf-related residential construction; and (2) Net gain to local tax jurisdictions from value premiums associated with golf course real estate.
Six (6) separate golf communities in Colorado have been identified that had residential units under development in 2019. These include Buffalo Run and Thorncreek in Adams County, Cedaredge in Delta County, Frost Creek in Eagle County, Ravenna in Douglas County and TPC Colorado in Larimer County. Multiplying the total number of units under construction at each location by their average cost of construction ($400,000 per unit) and summing all of these values yielded a total 2019 golf-related residential construction figure of $94 million.
The presence of a golf course with direct frontage on, or in immediate proximity to, a residential unit will provide an added value to the residential property known as the “golf premium” (estimated previously by NGF to be 15 percent). This golf premium is manifested by the extra value a homeowner can expect to receive on the sale of a housing unit located on a golf course, or within a defined golf community. As this sale is considered a transfer of assets rather than economic output, this is not included in the economic output analysis. However, the enhanced value of golf residential real estate does impact the total amount of property taxes collected by local authorities. It is estimated that the “golf premium” associated with property values in these developments to be upwards of $3.3 billion, with a property tax impact of $20.3 million in net gain for local taxing authorities to be used for education and other local initiatives funded by property tax revenue.
Approach
What is measured
New golf home construction generates significant regional economic activity and impact. For this segment, expenditures related to new golf home construction are measured, as well as economic activity associated with the property tax assessment valuation of golf homes and the premium associated with these homes. The “golf premium” is the extra amount of property taxes collected by local authorities.
How it’s measured
NGF conducted online research to identify new golf community developments and new phases of development at existing golf communities. Input was provided from the Colorado Golf Coalition. Real estate developers, builders, and real estate agents were contacted to identify the number of new homes under construction in the base year and the average construction cost of these homes. There were six (6) communities identified with 235 residential units under development in 2019, with an average construction cost of $300,000.
The calculation of the golf premium impact on local property taxes involves two parts: (1) the “premium” associated with proximity to a golf course was estimated based on previous NGF research on golf-residential communities at 15 percent premium; and (2) Identified the total inventory of residential units (by type) inside golf communities in the state multiplied by the average sale value (by type) of these units and then applying the 15 percent golf premium and the estimated 0.6 percent statewide effective property tax to market value estimate (source: Wall St 24/7[21] & Tax-Rates.org/Colorado[22] both had 0.6 percent as the estimate for 2019-20). The calculation is summarized below:
