Development and Permitting Application Process
It’s like clocks don’t exist in local government offices.
Perhaps the most flagrant issues facing housing affordability in the Portland Metropolitan Area occur in the backrooms of your local city hall. When housing professionals engage the development and permitting process they are met with resistance on almost every level. From pre-application to final permitting checks, the process and people encountered by construction professionals are often unhelpful, disinterested and in many cases hostile to the people a community is counting on to build their homes.
The best example we can provide is the standard pre-application for development meeting. Billed as an opportunity to help the developer compose his application for development, here is how the process goes:
- A developer buys or options a piece of land after doing a great deal of due diligence work to ensure construction is possible.
- Said developer approaches the governing jurisdiction for a “pre-application” meeting to discuss the project. This often takes weeks to schedule.
- The jurisdiction sets up the meeting, which includes somewhere between 5 and 10 other bureaucrats/staffers from departments or organizations with some regulatory responsibility in the project. They all come to one room which in theory would be a good thing.
- The developer knows that he cannot possibly answer all their questions without professional help, so he hires a consultant to come with him to the meeting to decipher the code and what the staff is talking about.
- At the meeting, the staff of the local jurisdiction spends an hour telling the developer why the project is a bad idea and every possible way they might consider making the project more difficult. A participant in this process is never quite sure if their intent is to purposely discourage or if they are just incapable of understanding that people must live somewhere and their help would go a long way toward making that happen.
- The developer leaves the room discouraged and must decide if it’s worth the risk to move forward. If he/she listens to the jurisdiction staff, then nothing would ever get built. If he/she decides to push forward, they are risking hundreds of thousands, if not millions of dollars, their credit and often their personal wealth including their home. All this just to build houses for customers who are clamoring for their product.
THAT’S JUST THE FIRST MEETING.
For most people, a new home just appears out of some well contoured dirt. Some people show up, pour some concrete, build some walls, throw appliances and sheetrock in and put out a for sale sign. Takes like 90 days right? No big deal. However in Oregon, that same house in the new community you are seeing today was likely first proposed more than eighteen months to two years before the home was finished. In that time, the new community has been scrutinized by dozens of regulatory professionals, bureaucrats, neighbors, the public and if the project is in any way controversial, probably by a court of law.
Sound crazy? Consider the minimum process for a 10-20-unit subdivision, which is considered small by almost any standard, to reach fully completed status:
- 30-60 days to put together the initial application for development. This comes after the pre-application meeting described above and the package requested is so complicated, it almost always requires a professional planning consultant to file, which costs thousands. The application and review process will also cost thousands.
- Post ACCEPTANCE of your application (which is the jurisdiction saying you have completed it correctly) it will take the local jurisdiction 45-90 days to review it and dicker with your professional over changes. They then return any fixes they want and/or write their staff report. Sometimes a neighborhood meeting is held with those in proximity so they can tell anyone who will listen why they always thought the vacant land in their neighborhood would never be developed. The final report will be forwarded to a planning commission of locally appointed officials for consideration.
- The meeting for the planning commission must be scheduled and this often takes another 30 days to complete. The developer should attend the meeting with his paid consultants to defend the project in the face of public testimony and scrutiny from the planning commission, which strangely often mimics all concerns staff might have had prior to the hearing. These meetings are particularly fun as the developer is grilled about the process, the type of community being built and forced to bargain with lay people appointed to the commission on all sorts of aesthetic questions and concerns they feel they should have a voice in. Revisions occur to make these folks happy, then an approval is often given. We are now 4-6 months into the process.
- If the project successfully makes it through planning commission approval, it advances to the engineering and platting stage. Again, the developer must hire a set of private engineering professionals to interface with the public engineering officials because the process is massively complicated. A set of plans is developed by the private engineers and passed to the public engineers who mark them up and return them to the private engineer for revisions. This process goes back and forth several times and takes a minimum of 3 months but more likely 6 months to complete before engineering will sign off on the project. We are now 9 to 12 months into the process and hundreds of thousands of dollars just in collective consulting costs, most of which is necessary because the development code is so incomprehensible.
- Now that the plans for building the lots (JUST THE LOTS) is complete, the developer hires a construction company to build the lots. This process usually takes 4-6 months and includes putting in all utilities, roads and leveling the lots. During this period, the local jurisdiction visits the site weekly to inspect and sign off on completed construction. The developer is charged for these visits and if the inspector cannot make it out on time, may have to stop construction or delay the process to await inspection. At the end of this process, a final plat of all construction is developed. This is a survey and map created for public records that includes the location size etc. of all public improvements and utilities. We are charitably at 14 months here, but likely 18.
- FINALLY, WE HAVE LOTS! FLAT DIRT, YAY! Now we can build a house. The builder must submit for a building permit and pay all the associated fees for doing so. Again, the application is so complicated, the builder likely must hire a consultant or have an employee on staff to put it together. The local jurisdiction will reject the permit if it is not complete and this often takes 15-30 days to put together. Once the application is complete, the builder is informed about how long it will take for the application to be reviewed. If they are lucky, its 4 weeks, but in many jurisdictions a building permit is taking as many as 6-10 weeks or longer to even be touched by the staff! They return any changes they want made, which delays the process and finally, right around 120 days, the permit is returned.
- When that permit is issued, the builder cannot build until all system development fees and building permit fees are paid. These range from $30,000 per home to roughly $60,000 per home depending on where the house is being built. The builder fronts this money, knowing he cannot get it back until the sale of the house which is likely 90-120 more days away from being built and sold.
- Finally, the house is built. It takes 75-120 days to build an average home. During that time, the jurisdiction sends out inspectors on call to sign off on permits, charging for those services. These bills are paid by the developer/builder prior to sale and we are now around two years from the time this project was proposed to the jurisdiction.
Assuming a developer/builder takes a project from land purchase to full construction build out, they are looking at two years of paying bills, investing time and money without any return and the entire time is spent satisfying the government process for construction in our area. Name another industry where government regulation consumes this amount of time and money to make a product that is vitally needed by its constituents? During a housing crisis, where nearly 75% of our citizens cannot afford a home, this is the best we can do?
It’s time for change. The process needs to be quicker and far less bureaucratic. Here are just some of the changes Affordable Oregon will fight for in the Portland Metropolitan Area:
- Local jurisdictions should begin processing applications for development and engineering TOGETHER. So long as a project is not considering a zoning change or significant variance and the developer is willing to pay a reasonable fee for dual processing, every jurisdiction should move forward with both simultaneously to the extent possible. This can shave significant time off the length of the process.
- Development applications and building permits deemed incomplete by the jurisdiction should be allowed to continue moving forward in the process if the developer cures the issue within a 15-day period. The local jurisdiction can work on the portions submitted until the additionally requested materials arrive or until they can no longer move forward. Stopping an application for a piece of information not immediately needed because of a clerical error or mistake is not acceptable.
- Local jurisdictions need to change their mindset. Staff in most jurisdictions place themselves in either an ambivalent or adversarial position to the developer/builder. While local jurisdictions have a responsibility to protect their constituents, they also need to have an open mind to solutions that might achieve the same goal or set of goals in a different manner. Being open minded and helpful goes a long way.
- Hard deadlines for all development application processes or the offending jurisdiction is fined/open to civil liability for not complying with the law. Too often, local jurisdictions treat time as if it’s free. For a developer/builder, TIME COSTS MONEY. Local jurisdictions need to feel that pressure as well.
- Civil liability for elected and appointed officials as well as employees of local jurisdictions that willfully violate state and local laws and time limits. Currently, the law tells these jurisdictions what they should do, but it allows for very little civil remedy when an individual with an ax to grind chooses to disrupt the process.
If local jurisdictions are forced to work quicker, hire additional staff and use their funding efficiently, the process will speed up. It’s time for us to hold them accountable.
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