Building permit review bottleneck hindering construction projects

Small reduction seen in residential and commercial application stockpile

Progress is being made on a permitting backlog in the City of Austin's Planning and Development Review Department, but the continued bottleneck could hinder home construction, remodels and growth in the construction industry.

Kathey Comer, executive vice president of the Home Builders Association of Greater Austin, said housing construction is a critical issue for Austin and an integral part of the economy, making it important to address the backlog as fast as possible.

"It will become worse as we progress into the year. It will become worse each month," Comer said. "Traditionally, June and July are the heaviest permitting months [because of] longer days and fewer weather issues. We anticipate the problem becoming even more critical."

Comer said the review backlog has already affected home starts in the Austin area, citing that housing starts in the Austin Metropolitan Statistical Area in January were up 1.7 percent compared with December but were down in the City of Austin. The Austin MSA consists of Bastrop, Caldwell, Hays, Travis and Williamson counties.

According to information from Metrostudy, a research provider for housing, retail and related industries, Austin housing starts were up 30 percent in 2012—to 7,981 units, compared with 2011. A home start is the beginning of construction of a new house.

"We've got some immediate issues to work through," Austin City Councilman Chris Riley said at a council meeting in March. "We've got backlogs that we really want to get cleared out just in a matter of months."

Getting through the backlog

City staff said the bulk of the backlog is in zoning review for new one- to two-family home construction. The department is running about eight weeks behind on standard seven-day and two-day review processes for new construction and remodeling projects. Ideally, staff said, there would be no backlog, but on March 21, there were 342 pending residential review applications.

"[The backlog] has personally delayed a couple of projects," said Ray Tonjes, owner of Ray Tonjes Builder Inc., a local custom home building and remodeling company. "It has caused builders and subcontractors to not be able to work. For a lot of smaller remodel projects, it's taking far longer to get the permit than it does to do the work."

Comer said the HBA has heard of builders and remodelers who have not been able to get a permit for four months, which directly affects their livelihood and the timeline for customers.

"You cannot build without a permit," Comer said. "If you are a builder and you cannot build, you have no income. If you're a customer who needs a home built by a specific date, you're probably out of luck."

Comer said the backlog has an effect on more than just builders and remodelers.

"The trickle-down effect also should not be overlooked," Comer said. "If you can't build a home or remodel a project, no one needs carpet, no one needs lighting, no one needs plumbing, no one needs lumber, so many industries are affected."

Though there are still a large number of backlogged applications, city staffers have already taken measures to help reduce the number of pending reviews and have seen some progress.

In February, Austin City Council approved four additional employees to address the backlog. The additional hires are dedicated to intake and consultation, so review staff can be free to focus on the backlog.

City staff members have also created a temporary Certificate of Compliance program in which plans that meet certain requirements and are submitted and sealed by Texas licensed architects or certified building designers will be approved with limited review. About 12 percent of applications in the backlog have been through the process as of March 15.

John McDonald, development service manager with the city's Planning and Development Review Department, said the "popularity is not too great" for the program because some architects have been leery of assuming the extra liability.

Tonjes said he had a project that was waiting for a review for more than a month. When he went through the expedited process, the plan was reviewed in two weeks.

Causes of the backlog

According to a November memo to City Council from Greg Guernsey, director of the Planning and Development Review Department, the backlog exists because of a 44 percent increase in applications for review and an unexpected loss of about 75 percent of the residential review staff.

J.B. Meier, chief plans examiner with PDRD, said commercial plan review is in a similar situation as residential plan review, but not to the same extent. He said the high point of the backlog was around May with between 150 and 160 plans waiting for review, but the backlog was down to 117 applications by Christmas.

"Well, [the backlog] is slowing [business development] down," he said. "They can't get started as quick as they anticipate. In all cases, I'm sure it's costing them money. They're having to pay interest on loans—money they may have borrowed to build a big project."

McDonald said the staff, which filled all the positions it lost in 2012 by mid-January of this year, has been trying to "expedite the easier projects" such as swimming pools, fences, additions of decks and interior remodels, along with holding stakeholder meetings to field new solutions to the backlog, considering revisions to the Land Development Code and implementing an electronic application process.

Tonjes said he has seen improvements in the reviewing process but that the situation is still serious.

"At the end of the day, if they were a private business, they'd be out of business," Tonjes said.

McDonald said that as the number of applications continues to increase, it is going to be difficult for the department to clear the entire backlog in a "timely manner," estimating about eight months before the department is caught up as a worst-case scenario.

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