Benchmarking Development Approvals Processes Across the U.S.
Many municipal approval processes tend to be opaque and provide developers with limited information.
To help address these issues, the NAIOP Research Foundation commissioned Distinguished Fellow C. Kat Grimsley, Ph.D. cantab, director of the Masters in Real Estate Development Program at George Mason University, to create a Development Approvals Index to evaluate the transparency, consistency and accountability of municipal permitting and inspection processes.
In a session at the 2021 Chapter Leadership and Legislative Retreat, Grimsley shared her experience developing the tool, an overview of its structure and variables, and her goals for its use as it continues to be refined. The Index consists of an Excel spreadsheet that end-users can complete based on available information for the permitting and inspection processes. It can be used for all product types.
Grimsley was joined by panelists Scott Adams, partner at McGuireWoods LLP; and Bryan James, permitting manager for Bohler.
Adams began by sharing about an experience he had working with Fairfax County, Virginia, located just outside of Washington, D.C., to evaluate the county’s development review processes and look for ways to improve them.
“One of the issues we ran into early on is: How do we benchmark the county’s review process against other jurisdictions?” Adams said. “We spent months trying to create an apples-to-apples comparison and ultimately found it almost impossible to create a good set of metrics to compare the processes in Fairfax County to even the counties next door.”
When Grimsley reached out to Adams for feedback on the Development Approvals Index she was working on, he found it be a great opportunity to offer his insights on a much-needed benchmarking tool.
In discussions with Adams and developers, as Grimsley was wading through all of the potential variables that could possibly be utilized when evaluating a jurisdiction’s approval processes, she noticed the same three themes kept coming up.
These became the three “pillars” on which the Index is structured: Transparency, Accountability and Consistency.
“Conversations with the development community revealed that really the most important thing wasn’t necessarily cost, though cost is enormously important, and wasn’t necessary time, though time is enormously important, it was that the jurisdiction was transparent and accountable and consistent,” said Grimsley.
You can plan and budget for different times and costs and other variables if you are certain what those are, she pointed out.
To use the Index, users follow input prompts to enter data that is used to calculate scores for different jurisdictions. Different pillars are weighted differently, with the Consistency category weighted highest at 40%, followed by Accountability at 35% and Transparency at 25%.
James shared his own experience using the tool as a test user. He pointed out that while some jurisdictions may seem very focused on customer service, and have an easy-to-use website that conveys efficiency and modernity, that doesn’t necessarily translate to their permitting and approvals processes. “That’s why this tool is so helpful, and the weight of the different pillars – it asks so many varied questions, and you kind of get a better picture,” he said.
There are many potential uses for the Development Approvals Index, Grimsley pointed out. The tool could be used by the development community as a call for best practices; for benchmarking by the jurisdictions themselves, if they want to improve their processes; as an economic development tool to try to attract development; and for use by developers who are exploring entering new markets or want to compare opportunities.
“I look forward to seeing what the feedback is on the use [of the Index] and how this can help our community,” she added.
NAIOP will be working with its chapters to complete the Index and will eventually aggregate the data from multiple jurisdictions. By completing the Index, the chapters will be able to see how their municipalities compare with each other as well as additional jurisdictions in the U.S. Grimsley encouraged NAIOP chapters to participate and to contact Jennifer LeFurgy, Vice President for Knowledge and Research, for more information.
The NAIOP Research Foundation will release the Development Approvals Index, including the author’s full methodology and in-depth background information, in late February 2021.
