All last year the Utah Home Builders Association lobbied the Utah governor’s office for some sort of stimulus to restart the state’s home building industry.

The organization’s representatives tried to develop down-payment assistance loans, proposing to fund them through state retirement funds or selling bonds.

“We worked through the summer and into the fall,” said Taz Biesinger, the organization’s executive vice president. “There were just a lot of different road blocks” and nothing panned out.

In the end, the work was not in vain. Earlier this year when the state started getting federal stimulus money the governor’s office quickly decided to use some of it to help stimulate the local housing market. The result was even more stimulating than a down-payment assistance program would be -- $10 million in direct grants of $6,000 to any buyer of a spec home. The only constraint was that the buyers couldn’t make more than $75,000 as an individual or $150,000 for couples.

“We had convinced the governor that the housing market helped lead the country into recession so we needed to get the housing market to lead us out of the recession,” Biesinger said. Utah’s builders built somewhere between 24,000 and 25,000 homes a year at the peak, Biesinger added. That number dwindled to about 4,800 last year.

The grant program, called Home Run, awarded grants to 1,652 buyers in less than 12 weeks. An analysis by the University of Utah’s Bureau of Economics and Business research said that translated into the sale of $376 million worth of new homes.

The program was so successful that recently the governor’s office announced it would dedicate $8 million more in federal stimulus money toward Home Run 2. This time the grants will be smaller, $4,000 each, and buyers will be able to use the money to buy homes to be built, not just those already in inventory. Designed to be used in conjunction with the federal $8,000 tax credit for first-time buyers, the second phase is expected to create a multiplier effect through the economy, saving or creating 9,000 jobs and bringing $25 million in income and sales taxes back into the state. Like the federal tax break, it expires Dec. 1.

"We know from experience that the creation of new homes does more than just benefit developers and contractors,” Utah Gov. Gary R. Herbert said in announcing the program. “It revitalizes broad sectors of the economy, from painters and plumbers and electricians to decorators and furniture shops and specialty stores."

 Teresa Burney is a senior editor with Builder and Big Builder magazines.

Learn more about markets featured in this article: Salt Lake City, UT.