How long does it take to get a building permit approved? A few weeks ago, we wrote an article about what’s really behind the housing crisis and how time-consuming permitting is a major inhibiting factor. After this article, several readers wrote to confirm this. Coincidentally, a local newspaper in San Fransisco ran an investigative report about how long it takes to build anything in San Fransisco, titled “Yes, It Takes Forever To Build Anything In San Francisco, and That Is Part of Why Luxury Housing Is All That Gets Built”. So let’s take a look at the data.
According to the article by SFist, smaller builders can face 3-4 years of bureaucracy before they can even start the construction process, a process in itself that could take over a year. In San Fransisco, the entitlement and permitting process have become an industry itself, employing consultants and independent contractors, which only the richest developers can afford. So what are the wait times for building permits in San Fransisco?
The investigator in the article went back and analyzed every permit that had been issued for the past few years and found some startlingly high numbers. According to the article, on average it takes 627 calendar days for a multi-family development building permit. Even more alarming, on average it takes 861 calendar days (which is two and a half years plus) for a duplex or single-family home building permit. And this doesn’t even include the planning or entitlement process that comes before permits can be issued. Since 2012, the wait times for building permits in San Fransisco have increased by 83%.
So while corporate greed may have something to do with it, people in the field suggest the main reason luxury housing gets built as opposed to anything else is that nothing else is profitable to build if the permits take two-plus years to obtain. If you have to wait two years to get your permits, you have to pay carrying costs on that property for that period of time. Taxes, fees, interest ownership, plus carrying costs of your business as a developer. If you’re looking to sell something that is entry-level or for a first-time buyer, these added costs can’t be factored into the selling price for this type of property.
Supposedly, the local governments have some type of permit streamlining process, but no one has seen any results from this. In the last decade, according to the article by SFist, 270 projects in San Fransisco took more than 4 years to get their approvals – not to build – to get approval.
So we ask you, the reader, what do you think? Do you find that permitting is difficult in your area? Do you find that streamlining has gotten better or worse in your area? Do you think technology and automation would help close the permit gap? Let us know in the comments.
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