Unveiling the Labyrinth: Why is Permitting So Slow?
Every single construction project in the US starts with a permit. Contractors can’t break ground and get to work until permits are approved. These are the critical gateways that every project team must go through to deliver their projects.
While permitting is crucial for ensuring ethical and quality development, everyone knows permitting is slow, sometimes even slower than the construction project it governs. In this article, we wanted to break down exactly why permitting is so slow. Cities can often take weeks to turn around a review, but there are several other factors that lead to months or even years-long approvals.
City governments are intricate ecosystems, divided into many departments, each with its own set of initiatives. Depending on the permit, numerous departments will play a role in the permit review. On a typical commercial building permit, at least a dozen departments will review the application, including not just the building department but also the utilities, the health department, and even the fire department. This often results in departments working together but also working to review permits in parallel. They each have different mandates and standards, making it difficult to align and coordinate, which can impede the progress of permit reviews. Guidelines are implemented around the plans for city development. Each department enforces its own guidelines.
Take site development permits, for example. Site development determines where a proposed development will fit into the major complex puzzle that is the city’s development plan. Every department involved in city planning wants and needs to have a stake in deciding the approval of the site development. The Utilities Department manages the entire water and wastewater distribution system servicing the residents of this city. The Parks and Recreation Department aims to create accessible and safe public open spaces for communities to gather, socialize, exercise, and play. The Environmental Department aims to protect our waterways and air quality and prevent unnecessary increases in our carbon footprint. Those are just a handful of the numerous departments that play crucial roles in different aspects of the development review. Any lack of synchronization contributes to delays.
- Complex requirements and processes that are hard to research
Navigating the labyrinth of construction permitting can be an arduous task. The process often involves several steps, from initial application submission to inspections, approvals, and final permits. Understanding the specific requirements for each step can be challenging due to their complexity and the evolving nature of building codes and regulations.
To add to the complexity, city governments occasionally update their permitting procedures and requirements, making it even harder for construction professionals to stay current. This dynamic environment requires continuous research and adaptation, consuming valuable time and resources.
Ever seen an episode of The Great British Baking Show? The second challenge in every episode is the blind “technical challenge,” where bakers are given minimal instructions on the recipe and no warning as to what it will be. Never made Prinzregententorte or likely never heard of it? Baking it with a few lines of a recipe and making it look and taste like the real deal will be pretty challenging. Permitting can feel pretty similar. The instructions aren’t clearly outlined and might look entirely different from any other projects you’ve permitted. There could be a huge learning curve for various permit types, approvals, and processes, especially when you are working across multiple jurisdictions.
- Labor shortage
The labor shortage in construction is probably a topic you hear or talk about every day. According to ABC, the construction industry will need to attract more than half a million additional workers on top of the normal pace of hiring to meet the labor demand. The labor shortage is particularly painful for permit review because there is so much institutional knowledge built up on the city side, and there's been very high city turnover during and post-pandemic as the nature of permitting review work changed so drastically with the shift to digital and remote work. We recently had a Pulley customer tell us about how in their city, the reviewers were new at the job and lacked guidance from more experienced leaders because of a shortage of experienced employees at the city, which was adding unnecessary complexity and slowdowns to their permit approvals.
- No two cities are the same
In construction, permitting has a wide variation in rules and regulations from one city to another. What may be acceptable in one municipality might not pass muster in the next. Take, for example, the City of Austin and the City of Westlake Hills, neighboring jurisdictions in Texas. In Westlake Hills, the city will route a building permit application to the various disciplines that need to review it. In Austin, the applicant must route each approval to the right department at the right step in the sequence to ensure you have the prerequisites required for the different disciplines to submit for review. This inconsistency makes it difficult for construction professionals to navigate the process efficiently. And we aren’t talking about a handful of different regulations–– there are 19,000 unique jurisdictions across the US, each with its own process!
Each city has administrative processes, like what permits you need, when you need them, what documents must be included, how and where to submit your permit application, and more. This diversity means that architects, engineers, contractors, and developers must familiarize themselves with the specific rules of each city where they operate, which can lead to time-consuming research and adaptation.
A developer could work on two projects 1 mile away from each other with entirely different permit requirements and approvals because they fall into different jurisdictions. With tens of thousands of pages of codes, ordinances, and policies being enforced, it would take a huge amount of time and effort to create any sort of reusable process or blueprint from one jurisdiction to another, which is hard to justify if you're just one firm, doing a dozen or so projects a year.
- So many project stakeholders
Cities aren’t the only ones with lots of stakeholders. On the other side of the permit counter, there can be a dozen different firms all working together as one project team to submit the permit. Permitting usually involves the property owners, tenants, architects, engineers, and contractors. The need for coordination among these parties can be a significant bottleneck in the permitting process.
Each stakeholder brings their set of responsibilities and requirements to the table. Delays can occur when parties do not have aligned objectives, information, or timelines. For instance, discrepancies between architectural plans and engineering specifications can result in back-and-forth revisions that slow down the permitting process.
And how are all of these stakeholders communicating? Email. Today, permitting processes often rely on outdated coordination methods such as paper, email, and spreadsheets. This reliance can lead to inefficiencies and slowdowns as communication becomes fragmented and harder to track. Project teams and city reviewers are already drowning in emails, with each stakeholder likely juggling multiple projects, which calls for constant context switching and searching through email threads for the most up-to-date information. Teams are losing huge amounts of time just trying to manage communication across stakeholders.
- Outdated City Systems
You might be able to file your taxes from your smartphone, but construction permits are a whole different story. Cities have struggled to keep pace with digital transformation. Those that have digitized their permitting processes were mostly spurred on by the pandemic and are buggy and challenging to use. These outdated and clunky online platforms can exacerbate delays and frustrate stakeholders.
Inefficient online systems can lead to problems like slow application processing times, technical glitches, and difficulties in tracking the status of permits. A recent McKinsey study on the City of Austin’s site plan review process showed that several major pain points in the process revolved around a lack of clarity and information from the city. The report highlighted issues around file size limitations for uploads, uncertainty on submission status, low-resolution site plans, unclear permit signing orders, and more. McKinsey specifically pinpoints “outdated technology” as a cause for delays.
Construction permitting is essential for ensuring that buildings meet safety and zoning standards, but its slow pace can be a considerable impediment to timely project completion. The five causes mentioned above - bureaucracy, variations between cities, the involvement of multiple stakeholders, complex requirements, and clunky city systems - all contribute to the sluggishness of the process.
Addressing these challenges requires combining efforts from city governments, construction industry professionals, and technology providers. Streamlining permitting processes, improving digital systems, and fostering stakeholder collaboration can help expedite construction permitting and unlock the potential for more efficient urban development. Ultimately, a more efficient permitting process will benefit everyone, from property owners and developers to the broader community looking forward to the positive impact of construction projects.