The year 2016 doesn’t seem as if it was that long ago, but three years is a lifetime if you’re waiting to obtain permits to build a project and instead you get caught up in regulatory red tape.
Thanks to efforts led by NAIOP Georgia, the important process of permitting is now improving in the state. By following clear rules and meeting defined standards, developers in Georgia are continuing to build valuable properties that provide places for people to work, live and play.
The permitting process needs to be predictable and transparent, and the reviewers need to be held accountable. When a state or local government establishes a deadline to issue a permit or perform an inspection, it should meet that deadline. When it doesn’t, it adds costs to the building process and delays projects. That’s not fair to builders or developers.
Until recently, the permitting process in Georgia was unpredictable. Some local governments hit their deadlines and others did not. Some local governments imposed sensible fees; others treated the process as a way to generate income.
It would have been impossible to fight to solve these problems in each local municipality or county. Beginning in 2016, NAIOP Georgia led a coalition of commercial and residential real estate professionals to support passage of GA SB2, called “The FAST Act – Fairness, Accountability, Simplification, and Transparency – Empowering Our Small Businesses to Succeed.” It’s a sensible measure that will improve the permitting process statewide and make it easier, and more efficient, to build in the state.
In 2017, the act had successfully moved through the state Senate. But the bill stalled that year in the state House. To improve its chances in the future, NAIOP Georgia reached out to other real estate groups, including the Association of General Contractors, Georgia Association of Realtors and Atlanta Homebuilders Association, along with other key stakeholders. The bill seemed to be on track, but it was eventually derailed again when it was opposed by the Georgia Municipalities Association (GMA). The GMA represents municipal governments in Georgia, and some of these local governments were nervous about the FAST Act.
However, NAIOP Georgia saw this as an opportunity to expand their coalition and sat down to discuss ways to handle GMA’s concerns about the bill. As the 2019 session progressed, GMA came on board to support a slightly modified FAST Act. Now known as HB 493, The Private Permitting Review and Inspection Act, the bill passed both houses and was signed into law in May. It takes effect July 1.
The act will make it much more efficient to build in Georgia. It provides a common-sense framework for local governments, forcing them to deliver permits or conduct inspections when promised.
Key features of the act include:
- All jurisdictions must publish the regulatory fee charged, the schedule for review, and the items required for a permitting application to be deemed complete.
- The fee charged for the permit must be commensurate with the cost of delivering the service and not be a tax to cover other non-applicable activities.
- Jurisdictions must notify an applicant within five days of submitting an application if it is deemed complete. Following that notification, they must render a final decision on the request within 30 days.
- If a jurisdiction notifies an applicant that it cannot process the application in 30 days, the applicant has the option to use a third party (architect or engineer, at the applicant’s expense) to review and process the application, but half of the fee must be redirected to the third-party reviewer. The applicant can use a third-party reviewer even if the jurisdiction notifies that it can complete it in 30 days.
- In addition to permitting, many developers find scheduling inspections to be problematic, and the Act provides that inspections must be performed within two days of the request made by the developer. As with permitting, the applicant can opt to a third-party service provider to provide the inspection.
The bill also gives applicants options for how to meet local building codes. Applicants can use the standard process or develop an alternate approach, as long as they comply with local laws. Having such options should speed the permitting process and eventually lower costs by introducing competition into the process.
The next step for NAIOP Georgia is to educate its members about the benefits of the new law. As it is implemented, the chapter may find that it needs to be amended a bit. If so, the chapter looks forward to working with its coalition partners and state lawmakers to make the law even better.
Finally, the chapter hopes the legislation serves as a template for other states. For example, Florida and Texas are already considering versions. We look forward to showing other states that there is a better way to manage the permitting process. By being patient and building a large coalition to support the legislation, NAIOP Georgia has helped deliver better policy for builders and developers in the state.
Dwight Bell is president and CEO of Cannon Equities, Inc. He was 2016 president of NAIOP Georgia and is a current member of the NAIOP Corporate Board of Directors.