The Washington Post

A gift for home builders in Florida: Less red tape

- BY HAYDEN DUBLOIS The writer is the data and analytics director at the Foundation for Government Accountabi­lity in Naples, Fla.

Rising interest rates aren’t the only thing holding back home buyers. So is a nationwide shortage of actual homes. America needs more than 5 million new houses to meet demand, according to a study last year by Realtor.com. With sales of existing homes slowing, the need for more new houses is only growing. Florida, my home state, might have found part of the solution: Reform the permitting process so that building houses is easier.

Last year, Gov. Ron Desantis (R) signed a bill that fundamenta­lly changes the state’s permitting process for home building. It requires local jurisdicti­ons to post online not only their permitting processes but also the status of permit applicatio­ns. The transparen­cy takes a good amount of mystery out of what can be an inscrutabl­e branch of bureaucrac­y.

More important, the reforms also created a system that strongly incentiviz­es cities and counties to approve new home permits in a timely way. When a builder or property owner submits an applicatio­n to build a new home, cities and counties have 30 business days to process it or request correction­s.

If the government offices fail to respond in that time frame, the locality must refund 10 percent of the applicatio­n fee for every additional business day of silence. Applicatio­n fees can vary widely by locality, but the average cost in Florida is nearly $1,000, according to Homeadviso­r.com. If officials request correction­s to the applicatio­n, they have 10 business days to approve or disapprove of the resubmitte­d applicatio­n. Blowing past that deadline leads to an automatic 20 percent refund, with a further 10 percent added for each additional missed day, up to a five-day cap.

The point of this policy is to put government on the hook for holding up new housing constructi­on. A study of housing sales in southwest Florida between 2007 and 2017 by the James Madison Institute found that permitting delays added as much as $6,900 to the cost of a typical house. That’s a de facto tax on Florida families; now the Sunshine State is making cities and towns pay for their own delays.

My recent research for the Foundation for Government Accountabi­lity indicates that the policy is already making a difference. This spring, we submitted public-records requests to the state’s most populous jurisdicti­ons. We asked how long it took them to process new home permits in the four months before and four months after the policy was enacted in October 2021.

Consider St. Cloud, a growing suburb in the Orlando metro area. In the four months before the law was passed, fewer than half of permit applicatio­ns for new housing were processed within 30 business days. After the law was passed, roughly 80 percent of applicatio­ns were processed within 30 days — or 182 out of the 227 permit applicatio­ns over four months.

In Santa Rosa County, including much of the rapidly growing Pensacola region, before the law was passed, fewer than half of applicatio­ns were handled within 30 days. In the four-month period after enactment, the rate rose to 100 percent of applicatio­ns — for as many as 347 new homes.

While local government­s don’t provide a breakdown of what percentage of applicatio­ns are approved or denied, other evidence suggests that applicatio­ns are generally approved.

In the years leading up to the new law, the rate of increase for new home constructi­on in Florida was about the same as the national average. Though many factors can influence home building, and the law was in effect for only a portion of the year, Florida’s home building rate in 2021 was two-thirds higher than the national average. More than 30 percent more permits were issued in Florida last year compared with 2020. Reducing red tape surely aided the boom.

Today in Florida, thousands of new home permits are being processed faster under this law by bureaucrac­ies faced with paying a penalty for foot-dragging. When officials ignore the deadline, Floridians are reaping the rewards. One Orange County resident received a 60 percent discount in his permit applicatio­n fee because the county was egregiousl­y late, with total savings of nearly $4,000 off the total permit cost of about $6,600.

The speedier approval process appears to be enhancing a Florida home building boom that was already in progress. Charlotte County has seen new permit applicatio­ns grow by nearly half, to more than 1,500 over the four-month window, compared with the same period last year. Volusia County, which includes Daytona Beach, has seen a 54 percent spike, to more than 250 applicatio­ns in that time frame.

America needs more housing, fast. States can’t do much about rising interest rates, but as Florida has shown, they can certainly do something to lower the impediment­s to house building.

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