When Time Is Money: Home Builders Slowed By Permit Delays

Where there are permits, there are permit delays. In the past year, the time it takes city governments to process building permits has tripled. Building permits are required for all changes to the structure of a home, whether kitchen remodel, housing addition or starting from scratch. An approved permit is required before work can begin on these projects.

Permit delays cost money

Contractors are finding that permit approvals can take up to eight months in hot markets like California, up from three months previously. By that time, the prices quoted to customers are often outdated and have gone up. The extended time combined with the increased cost can give consumers cold feet, causing contractors to lose business.

Permit delays have cost contractors and developers thousands of dollars in loan interest and employee paychecks. Both employees and loan fees must be paid whether the project is moving forward or not. These costs are then passed onto consumers in a vicious cycle.

Blame the recession?

During the last recession, city governments throughout the country laid off employees to cut costs. Now that the housing market is in an upswing, officials are not adding staff to keep up with the need. Their offices are overwhelmed with the number of permit requests coming in, and long wait times are the result. The delays have even affected minor projects like changing a water heater or adding a new light switch.

Some have suggested that officials from cities with light permit traffic should assist in processing permits for overwhelmed cities. Others say governments in big cities should lift their hiring freeze to address the problem. These days, any kind of building project requiring a permit might have automatic permit delay time built in. Until it is solved, the magic word for building permits is… wait.

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