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Building permit delays are fixed through bureaucratic fiscal penalties

In the midst of a housing shortage, permitting delays intensify scarcity and add unneeded costs. Estimates show that delays in permitting exceed 6 months and thousands of dollars in many states. Building Industry Association of Washington estimates that the average building permit delay is 6.5 months costing homebuyers $35,000, pricing thousands of families out of the market.

Similar results are seen across the country. The Wharton Index from the University of Pennsylvania measures various tactics of housing regulation in different counties across the country (building permits are one of the regulatory hurdles measured). Three of the four mountain states are above the national average on the Wharton Index: Idaho, Montana, and Washington. Wyoming is below the national average.

Even though Wyoming is below the national average on housing regulation, citizens are still frustrated with building permit delays. Last week, draft legislation from Wyoming proposed introducing a remedy to permitting delays. Any city, county, state, or local power providing permits is required to do so in the most expeditious manner possible. Capping the wait time at 180 days for building permit approvals.

The draft House Bill would create an 180-day cap on government response to building permits. The bill requires local government entities to publish an approval schedule so applicants will know how long they will be waiting on permit applications and regulators would have fiscal consequences for delays. The bill proposes:

  • If a schedule is not published within 120 days all permit fees are returned to the applicant.

  • If the schedule Is not published within 180 days, the permit is considered approved.

  • After the permit is received notice should be provided every 30 days updating the applicant on the status of the application.

    • All fees will be returned after 60 days if updates are not provided.

    • Applications are considered approved after 120 days if an update is not provided.

The draft legislation addresses the delays home builders are facing and may improve the housing shortage. One aspects the draft does not address is the length of the schedule the governing entities can propose and Wyoming can look at efforts in other states to guide the total cap on the permitting approval process.

Florida was one of the first states to address building permit delays through bureaucratic penalties, and building permit applications successfully increased. House Bill 1059, signed into law in 2021 creates penalties for enforcement agencies if permits go unapproved within 30 business days for single family units, or if additional information is not requested. A 10 percent reduction per day is then applied to the fee. 120 days is given for master building permit applications and the same 10 percent reduction per day is applied to the fee.

The new law is fixing the housing challenges in Florida. The Foundation for Government Accountability found that before the law was passed in October 2021, a suburb of Orlando processed less than half of the permit applications within 30 business days. After the law passed about 80 percent of applications were processed in 30 days. In Santa Rosa County less than half were processed in 30 days before the law but after the law the rate rose to 100 percent for 347 new homes. Housing permits have also grown by nearly half in some counties since October 2021.

Texas has also attempted similar changes, with varying levels of success. Instead of enacting bureaucratic penalties, the state is allowing applicants to pursue third party approval of applications. House Bill 14 passed in June 2023 as many commercial developers were reporting months of waiting on basic permits. If a regulatory entity doesn’t act on the building permit within 15 days, the applicant can hire a third party to review the plans and issue the permit. The implementation of this new process has been rocky, with many builders unaware of the new law and governing entities unsure on how to proceed.

Wyoming’s proposal to remedy building permit delays follows the successful example of Florida by imposing bureaucratic penalties. The 2024 Wyoming Legislature has the opportunity to address permit delays next year and make it easier for builders in the Cowboy state to meet their housing needs.

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