Construction Outlook Still Terrible

Payson approves 27 new single family homes in one of worst years ever

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Payson stands ready to close out one of its worst years on record when it comes to issuing building permits.

The just-released November figures show the town issued just 27 permits for single-family houses, plus another 11 for manufactured homes.

For the calendar year to date, the town has issued just two permits for commercial construction.

Last year — which seemed dreadful enough — the town issued about 50 permits, as the construction crash brought on by the mortgage meltdown trashed one of the region’s economic pillars.

November offered only the faintest glimmer of hope — and that was relative to the rest of the year.

Builders applied for four single home and one manufactured home permit in November — with a construction value of $1.2 million. That’s roughly twice the monthly average for the year. However, the numbers remained far behind the monthly average pace of about 20 permits dating back to the boom times.

All told, the town collected $180,000 in building permit fees for the first 11 months of the year. The budget for the community development department stands at about $810,000 annually.

The past two years have stood in sharp contrast to the growth times that preceded, when the town routinely issued 200 to 300 building permits annually.

During the go-go days when mortgage lenders doled out money to anyone with a pulse, a clamor for growth controls convulsed town politics.

Payson imposed perhaps the state’s toughest growth controls, as permits topped 250 per year seemingly on an exorable run to 300 or more.

The growth control ordinance imposed a 250-per-year limit on permits for single family and multi-family units. In addition, the town imposed a $7,500 per unit water hookup fee, mostly to underwrite the cost of building the Blue Ridge pipeline.

Concerns about plunging well levels largely spurred the growth controls, which became moot almost as soon as they were imposed.

The restrictions remain in place, however, the regulations allow unused permits to accumulate from year to year. As a result, developers could in theory apply for 800 or 1,000 units next year without triggering the growth limits.

However, the bleak year-end building permit numbers show no signs of recovery in the devastated construction business in town, with levels down more than 80 percent from the peak.

The collapse of the construction industry has replaced fears of runaway growth with worries about funding the Blue Ridge pipeline and other community facilities like parks underwritten by the now non-existent impact fees.

The town had planned on paying the bulk of the costs of the $30 million Blue Ridge pipeline with the water impact fees imposed on new construction. The town had accumulated more than $4 million in such fees before the construction slowdown hit. Most of that money has already gone to preliminary costs on the pipeline, including the town’s share of the repairs on the existing pipeline between the Blue Ridge Reservoir and Washington Park, where the Payson pipeline will start.

About $10.5 million in federal stimulus grants and loans will offset some of the ultimate cost, but the town is still counting on a revival of the construction industry in the next two years to help offset the ultimate costs of the pipeline and treatment facilities.

Providing, of course, builders some day break ground on more than 27 houses a year.

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