Homeowners are not the only ones feeling the pinch in a tough economy — developers are hurting too.

After reveling in a construction boom in the middle of the decade, the construction industry is now facing a local market with increasing foreclosure rates and drastic decreases in the amount of construction work available.

Area developers are now rethinking how they do business in a struggling economy.

“Unfortunately the housing market drives everything else,” said Bob Koenig, president of the Cape Coral Construction Industry Association. “We’re not building homes, so we’re not building schools — it flows through the whole economy.”

Koenig, who is also vice president of Kraft Construction, gathered a panel of local industry leaders Thursday for a Cape Coral Construction Industry Association meeting to discuss the challenges of the current market and what lies ahead for the future.

“We’re down to a third of what we were in the heyday,” said Tim Rose, president of Arthur Rutenberg Homes.

“We’re doing business a lot differently than we were two or three years ago,” said Keith Moyer, vice president of Wright Construction.

Moyer said his company has restructured different departments, is looking for smaller projects and has reduced office paperwork by making electronic and digital upgrades.

“We’ve eliminated the paper in our office,” Moyer said.

Developers also would like to see some help from the local government in the form of lower impact fees and a smoother permitting process.

“They can get out of our way,” Rose said when asked what the government can do to help.

Scott Hertz, president and owner of Powell Construction, echoed Rose’s call for less governmental interference and called for a friendlier, less bureaucratic permitting process.

“We’re don’t have a culture of ‘yes.’ We’re not talking about permitting people who aren’t licensed, but they shouldn’t go out of their way to say no,” Hertz said. “I don’t know how the relationship between the building community and the permitting community became so adversarial, but that’s something I’d like to see change.”

Hertz, who is also a Cape Coral Community Redevelopment Agency board member, said a more diverse local economy could blunt the affects of a downturn in the housing market in the future.

“When building slows down, just look at the trickle affect. We need to bring in some other industries so we diversify our economy,” Hertz said.

Some panel members differed on how long the housing slide would last.

“We’re going to be bouncing along the bottom for quite sometime,” said Rick Losee, senior vice president of McGarvey Development.

“We think within the next six months you’ll start to see some movement,” Rose said.

Hertz, however, said it would take longer for the local market to bounce back.

“I think its going to be 2010 before we start to see an uptick at least in our city,” he said, but added that the market would rebound eventually. “Our long-term prospects are good. I don’t mean to be all doom and gloom.”