2 cities consider ways to put builders back to work

MAPLETON — With revenue continuing to fall, the leaders in at least two south Utah County cities are considering ideas that might entice builders to go back to work.

Both Mapleton and Salem are considering a deferment in charging impact fees until a newly built home is funded.

However, that would give current builders an unfair advantage over builders who have already paid those fees, noted Mapleton Councilman Mike Cobia, because the fees would be financed, typically for 30 years in the new mortgage.

Many builders in Mapleton have already paid the impact fees, but because of the economic downturn, they haven't been able to build or sell the homes. That was just one of the concerns builder Richard Lewis gave the City Council on Wednesday, following a discussion of issues hampering the construction industry.

New building permits in Salem are competing with some 300 lots that are approved and ready for construction, coupled with another 500 lots that are not yet ready, public-works official Dave Johnson said. Until builders use up those lots, the city likely won't see impact fees increase unless city leaders can come up with new ways to encourage construction.

Additionally, Salem has as many as 60 completed homes still unsold, with prices ranging from $300,000 to $400,000, Johnson said.

To get builders building again, the city is considering reducing the size of homes and lots, which in turn would reduce prices. Older residents with their children grown and gone don't need or want their larger homes, Councilman Brent Hanks said.

Salem lots average 15,000 square feet, while market demand is looking more toward 10,000 square feet and smaller, officials said. That could lead to the city revamping its zoning codes and allowing lots as small as 6,500 square feet, but adding construction requirements that builders use high-grade materials and finishes in constructing the residences.

Like Mapleton, deferring or pro-rating payment of impact fees until a new home is sold is also under consideration, at least for the short term. However, the council resisted lowering the fees. Impact fees and sales taxes are among the cities' most important form of revenue, officials say, and both are down.

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