This question is about building instead of repair, but I don't see a better place to ask.
We are building a house with a garage and three small living floors above it. The plans originally called for one of the instant on water heaters (running on natural gas) on the second living floor. The way the house is laid out, it would have to vent towards the street. In order to keep from venting towards the street, the builder wants to put the water heater in the garage and use a recirculating pump system. The way I understand it, the heater comes on when there is water flow. The recirculating pump would keep water circulating all of the time, so the heater would be on all of the time, right? Does this sound like a good plan?