The cost of a new house in Fort Worth is rising, in time and money
Delays in getting building permits approved may be costing the city of Fort Worth millions of dollars and causing some companies to scrap projects, home builders and developers say.
A surge in development requests combined with a staffing shortage at City Hall has led to longer review and processing times this year. According to the city’s Planning and Development Department, it took 28 days to obtain a commercial building permit in mid-August compared to a goal of seven days.
In a letter to Mayor Betsy Price and the City Council in late September, Jim Harris, a Fort Worth developer and home builder, said the development community has been “seriously challenged” in dealing with the city.
He blamed some of the increased permitting time on increased regulatory requirements. Harris also said that efficiencies promised when the planning and development departments merged a decade ago have not materialized but instead resulted in more red tape at City Hall.
“I’ve never known a planner who knew anything about the nuances of a development project or construction,” Harris said. “What was originally established to facilitate development no longer exists in Fort Worth. While there has been significant discussion about eliminating operational approval ‘silos,’ there remains a developmental passive/aggressive approach to project reviews and approvals.”
Because of those problems, Harris said, “The city loses when a project takes twice as long to be placed on the tax rolls. The city’s losing millions of dollars in revenue by these problems.”
The City Council has boosted the 2018 Planning and Development Department budget by $1.5 million and authorized 14 additional positions to speed things up. Already, eight professionals have been hired, and the remaining jobs should be filled this month, said Randle Harwood, planning and development director.
The department is also filling another 22 vacant positions to get back to full force, he said. Processing times are expected to drop significantly by January, he said.
A hot real estate market, particularly for apartments, has the city dealing with a high volume of requests. Permits for multifamily projects are up 128 percent in the last two years, according to figures. And the planning and development department’s revenue was up nearly $2.5 million by August compared with last year, another reflection of strong growth.
While a lull in recent weeks has reduced processing times down to about 13 days for both residential and commercial permits, Harwood said it’s expected to pick up again this month. The city expects to issue more than 13,000 building permits this year.
“Other cities in the region are having the same problem, the same issues,” he said.
Mark Presswood, the president of Panther Real Estate Solutions who chairs the city’s Development Advisory Committee, said developers and home builders tell him the city needs to be more flexible when applying rules and regulations.
For example, Presswood said subdivision codes that apply to projects on the outskirts of the city where land is undeveloped cannot be applied to older, inner-city parcels. The city staff should have the authority to approve necessary adjustments to assure that home building can start as quickly as possible, he said.
“It’s a tough environment right now,” Presswood said.
Mike Brennan, planning director for Near Southside Inc., who works with developers on projects in one of the city’s bustling areas, finds that to be true, too.
In some cases, making developments conform to rules that don’t fit older inner-city areas can result in the loss of a row of apartments or an outdoor dining area to maintain profit for the developer, he said.
“It’s a big deal,” Brennan said. “When land is so expensive, those things can kill a deal.”
Said Councilman Brian Byrd, “We are leaving money on the table big time because it’s taking so long for projects to get done. There are properties that could have been developed that aren’t because of it.”
Falling behind on permitting requests has been an issue before at the city, but it came up again a couple of months ago at a budget work session when city staff presented data on Fort Worth’s growth. So far this year, the city has handled about 650 plat reviews, more than double the number reviewed five years ago. Plat reviews are an early indication of what could be developed in the next several months.
Fernando Costa, an assistant city manager, said Fort Worth continually works to improve its processes, and adding and upgrading technology to improve service delivery. Last year, it switched to electronic filing for some developer documents, for example.
He said developers need an efficient and predictable process for the city to be competitive and that hasn’t been happening, particularly in the past six months.
“They want to know how long it’s going to take to get a permit and what rules the city is going to apply,” Costa said. “Almost every large project, every project of any size is going to be a little different.”