New home construction in Utah County pays for itself.

Rod Rydman, community relations director with the Utah Valley Home Builders Association, gave council members copies of the report and summarized some of its findings. The report was done by Elliot Eisenberg, a NAHB senior economist in Washington, D.C.

"Eisenberg found that the economic impact of homebuilding in Utah County is not only very large, but that single-family and multi-family construction pay for themselves within the first year of construction because the ongoing economic benefits accumulate faster than the ongoing costs," said Rydman in a letter enclosed in the report to the council.

"The NAHB model produces impacts on income and employment in 16 industries and local government, as well as detailed information about taxes and other types of local government revenue," wrote Rydman.

Construction impacts are divided into three phases: the construction phase; the ripple, or feedback phase; and the occupancy phase.

The construction phase is when goods and services are brought together and the construction is done, Rydman said. The ripple phase sees subcontractor money recycling through the economy. The occupancy phase is when homeowners move in, bring their income, pay taxes, and buy goods and services.

Cities without a strong commercial base do not receive as much benefit from the ripple effect, and have a harder time than cities like Orem and Provo, Rydman said.

In the current market, Utah Valley home builders are "struggling," but "holding on," said Rydman. Some are building or doing remodelings here and there, some are working out of the county, and some contractors and builders are joining forces, he said.

Asked about home values, Rydman said they are decreasing, as are the prices of homes, "Because those homes have to move."

Rydman said he is often asked what will happen next in the housing market.

"I think people are waiting to see what happens with the election, and with gasoline prices, then after the first of the year, it will come back. The housing industry -- like others -- is cyclical. It will come back. People need houses to live in, and the market will be ready to go," he said.

CITY Briefs

Orem renews Utah County Major Crimes Task Force participation -- An interlocal agreement for Orem's participation in the Utah County Major Crimes Task Force expired, so a new contract was approved by the Orem City Council as a consent item Aug. 26.

Fence modification issue continued -- The Orem City Council's consideration of a fence modification issue was continued from the Aug. 26 meeting to the second council meeting in September, to allow two parties to work out a possible purchase agreement.

An existing fence is located three feet south of the property line. The LDS Church has requested that the new Aspen Meadows Skilled Nursing Facility purchase property involved in order to prevent a maintenance problem.