A new report reveals residential building permits in the south-valley boomtowns plunged 80 percent since last year. By contrast, the capital saw permits skyrocket to 194 this year from 13 in the first quarter of 2007.
Industry insiders say surging gas prices, a sagging economy and energy-policy uncertainty due to the presidential chase have conspired to create the latest condo spurt. And it's no coincidence the new league of lofts are located near TRAX light-rail lines.
"People are more interested in moving into the city center rather than moving to the suburbs," says Jeff Hatch, Salt Lake County's auditor, who still is chewing on the economics of the shift. "We'll see some smart growth happening because people are concerned about their pocketbook."
To be sure, stucco McMansions, three-car garages and power-boat parking strips never will go extinct. But $4 gas and the mortgage meltdown seems to be driving people to the city's smaller dwellings in droves - even in class-conscious Utah.
The report, from the Bureau of Economic and Business Research at the University of Utah, compared numbers from first quarter 2007 with first quarter 2008. It also showed permits in unincorporated Salt Lake County dive to 570 from 1,192.
Higher property taxes
To offset the economic hit, suburban city councils in West Jordan and Riverton will hike property taxes. Riverton alone is proposing a 200 percent spike after building permits plummeted in the last year to just 100 from 1,000.
Bluffdale barely escaped a property-tax bump. Draper was saved by sales tax, mostly from IKEA. But Saratoga Springs, in Utah County, has seen new building-permit revenues retreat more than $1 million in the past year.
One anomaly is Sandy, which saw permits double to 62 from 31 over the same period. But part of that reflects a new condo project between Jordan High School and the end of the TRAX line, designed as a so-called transit-oriented development.
Eric Allen, a real-estate and market-research consultant for Metrostudy, says the negative numbers may be inflated since several cities raised impact fees, prompting builders to pull their permits. He notes 25 percent of suburban buyers fell prey to the sub-prime crisis, while another 20 percent of housing starts came from investors who have disappeared.
"That right there takes us down 50 percent," Allen says.
Tack on slouching consumer confidence and the pivotal presidential election, and people are afraid to buy, according to Allen.
Still, even if you subtract the condo towers planned at City Creek Center, Allen acknowledges a "more urban lifestyle is taking form here."
"A lot of the younger generation and the people who have moved here from out of state are used to that type of thing," he says. "They live and they work downtown or along the TRAX line."
Condos galore
Open-plan lofts and energy-efficient condos are sprouting along the TRAX spine on the fringe of downtown. There is the funky Angelina's Corner on the curve of 700 South and 200 West, ultra-green Rowhaus just north of the baseball park on West Temple, and there are hundreds of units planned at Market Station, a walkable development slated for the warehouse district in South Salt Lake.
"The really big suburban growth that we had been experiencing really dried up," Hatch adds. "From a community-development standpoint, it's pretty exciting - if it holds."
Legions of lofts also are near completion from the Main Library area to the streets surrounding Pioneer Park.
But James Wood, director of the U.'s research bureau, cautions that any trend requires more time than a single quarter-to-quarter comparison.
"It's way to early to make any conclusions," Wood says. "The amount of housing downtown is just a fraction. It's a niche market."
The rule of thumb, Wood notes, is that 1 percent of any metro area will live in the central business district. Branching out to include Davis and Summit counties, that equation still leaves room for just 5,000 additional downtown dwellers.
Plus, Wood says, loft prices are prohibitive.
"You'll be lucky to pay less than $250 a square foot, and not too many people can afford that."
Wood welcomes the focus on transit-oriented development - "there are people with that preference" - but says overall, residents must be convinced energy prices will be a long-term problem before making such a lifestyle change.
"It doesn't have anything to do at this point with gasoline prices or an interest in moving downtown in my view," Wood says. "Once the recovery comes, for better or worse, we're going to have more urban sprawl."
