Housing Will Not Keep Pace With Growth Until We Overhaul the Permitting Process

By Franco Faraudo

Most major American cities have a housing shortage. This is no surprise to anyone who keeps even cursory tabs on housing and rental prices. The solution to this problem is also rather well established: we need to build more places for people to live in places that people want to live. But while the solution to the problem is rather straightforward the path to get there is anything but. Much of the blame for our inability to increase the supply of housing to keep up with demand has been placed on NIMBYs. Local opposition can certainly be a hurdle to development, particularly large scale affordable housing, I don’t think it is the main reason for our struggles. After going through a permitting process myself I am convinced that we will not be able to achieve our developmental goals until we change the way that we issue building permits.

At the beginning of the pandemic I was confronted with a worrisome problem. I had bought my mother a house a few years before and as she aged she found it harder and harder to take care of it. She no longer needed the three bedrooms that she lived in and wanted to downsize, but could not afford anything on the market. So, I decided it would be a good idea to build a second home on the property (what they used to call ‘granny units’ and then for obvious reasons changed to Accessory Dwelling Unit (ADU). I figured I could rent the main house as a way to subsidize her smaller unit. The house already had an unpermitted area (it was a ‘man cave’ when I bought it) so I didn’t think it would be too much work to get it permitted and finished.

Right away I started to get the notion that it would not be as easy as I thought. We got pushback about the possible need for sprinklers, about the electrical panel capacity, and about the septic system’s ability to do all the gross things septic systems need to do. Eventually, I was able to edit the plans in a way that would appease the-powers-that-be and let the job get started but the months it took to do so made me realize the first problem was with our permitting system. There are too many departments and none of them work together. 

Depending on my problem I would need to talk to the right person at the plans department, the building department, the septic and well department, the fire department, the engineering department. At a certain point they could have told me I needed to report to the Department of Mutant Affairs and I would have started looking through the directory for the permit officer. The disconnect culminated when I had to go into the permit office in person (yes, this process took longer than the pandemic). I had to talk to four departments but rather than just booking time with each I had to go back to the front desk to sign in again and again. By the end the admin would sheepishly ask me to sign in again and I would just draw an arrow to my name that was listed multiple times in the lines above. 

Without centralization, there are so many opportunities for error. The average person doesn’t know if a change in energy efficiency calculation should go to planning or engineering. Oftentimes I don’t even think the people working at the office knew either, I would get conflicting answers from different people on different days. Permit departments need to be unified, each clerk needs to know more about the entire process so they can help people find a way through problems rather than just pointing them out. 

After work started I thought things were going to get easier, at least until the dreaded final inspection. That was not the case either. When I tried to call for a subfloor inspection (one of the many that needs to be done along the way to prevent ripping your work back out) the system said I did not have the authorization to do so. I called every department to try to figure out what was going on and no one knew. I even found out the city I was building in had a permit ombudsman (you know a process is bad when they have a person whose job it is to break up fights). Even he didn’t know (who breaks up the fights with the ombudsman?). 

Finally one of the senior officials came back from vacation and asked me if I had paid the school district. Why no, I had not, I told them, because no one ever said anything about schools. The Department of Education was one of the only city departments I did not have to deal with…yet. So I had to go, in person, to the neighborhood school district office and give them a check. I assumed it would have been easier for the permit office to collect the money on behalf of the school but I guess they didn’t want the extra complication. I could relate. 

What would have prevented this as well as many other snags I hit along the way was to have someone dedicated to my permit. Many agencies have “case workers” to make sure that the people using the system don’t fall through the many cracks formed when it was bolted together. What would make things even better is if these case workers had some accountability for how long their permits took. I’m not going to go as far as to say that they should get a bonus for getting more permits but I am absolutely fine with the person who helps get the most structures built at least having the best parking lot or being allowed a bit more flair in their cubicle. 

The main pushback against this idea is that it would make permits more expensive. To that I say, “Good!” The cost of the permits were almost inconsequential compared to the price of the project. I would have much rather have paid more for a faster process, especially one that can guarantee permits be completed within a certain time frame. This attitude is only compounded when property owners have to use construction loans. Getting a building done in time and repaying the bridge loans is the difference between a successful project and insolvency for most builders. 

I realize that not all permit departments are created equal. Some cities and states do a much better job than others. I am just speaking on my experience in one particularly difficult permitting department. But I do think that the problems I faced are repeated everyday in every part of the country. By bringing the permitting process under one department and assigning dedicated helpers (the wording here matters, these people need to have a mindset that they are meant to help get issues resolved) we could incentivize the type of development we need. So far I have heard exactly zero politicians run on the “reorganize the permit office” platform, so I am not holding my breath. But eventually, the places that do make permitting easier are going to attract development and maybe draw the attention of the cash-strapped cities that didn’t. The Empire State Building was completed in just one year and 45 days. Disneyland was built in one year and one day. We can build, we just need local governments to facilitate and not complicate the process.

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This website has a good overview of the time it takes to permit and build a structure in each state. While the averages are telling, I would also like to see the deviations because I suspect some states are having their numbers pulled up by developments that take way longer than normal.

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