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Whit Johnson reportingThe slowing economy has hit Utah's homebuilding industry hard. A new report from the University of Utah shows a record decline in housing permits. But what does that mean for the bottom line in Utah's cities?
It means a number of things ranging from city budget restructuring to layoffs in some cases. But experts say this wasn't entirely unexpected and other areas of the construction industry are still very strong.
Over the past few years, Utah has seen record growth. New homes, subdivisions and businesses are changing the landscape across much of the state. But now, residential construction appears to have hit a plateau.
"It's not limited to just one area. It's not just northern Utah County, or it's not just southern Salt Lake County, it's affecting the whole state," said Neil Abercrombie, with the Utah League of Cities and Towns.
The University of Utah Bureau of Economic and Business Research reports 2008 first quarter total residential building permits are down 58.2 percent from last year -- Utah's worst drop ever recorded.
Experts say it's forcing cities and towns to make some tough decisions. "You're basically left with a couple options: increase property tax, increase some other revenue sources, or make a cut somewhere," Abercrombie said.
In Herriman, two public inspectors and two building inspectors were recently laid off. Draper has also made several cuts in personnel, and cities across the state are taking a closer look at their budgets.
However, experts say while residential construction is slowing down, institutional, office and commercial construction is still on the rise. All are having a positive impact on employment and the economy.
"It has an effect in the availability of housing in the community. But in terms of land development, we are still very strong," explained Tom Burdett, West Jordan community development director.
Today, Eyewitness News talked to numerous city leaders in some of the most affected areas. Most are cautiously optimistic that things will get better soon, and all say they're doing what they can to keep the impact on residents to a minimum.
E-mail: wjohnson@ksl.com
