The City of Dallas has some of the lowest permit fees in Texas, with Dallas ranking around the bottom when it comes to fees for single-family construction projects ranging between 2,500 and 3,500 square feet and multifamily projects spanning 350,000 square feet.
According to the City’s Development Services Department (DSD), building permit fees are assessed in accordance with Chapter 51A of the Dallas Development Code, Ordinance No.10962, and Chapter 52 of Administrative Procedures for the Construction Codes. Payment is required at the time of application, and any additional fees during plan review are paid before permit issuance.
“I know Council Member [Tennell] Atkins has been an advocate for development and is interested in how Development Services charge its fees [and] if its processes are efficient,” Vernon Young, DSD assistant director, said during a meeting of the City’s Economic Development Committee (EDC) meeting earlier this month.
As previously reported by The Dallas Express, North Texas has been seeing a development boom and significant population increase, with DFW cities like Denton, McKinney, Frisco, Plano, and Fort Worth enjoying most of the benefits. Developers have reportedly been showing less interest in Dallas — which lost residents in recent years — partly due to the burdensome regulations and slow permitting process that have been making the city more difficult to build in under City Manager T.C. Broadnax.
DSD partnered with the MGT of America Consultant Group to conduct a fee study to determine if Dallas offers competitive development fees, which can include fees for plan review and inspections, compared to other markets in Texas.
The study analyzed the fees charged by several Texas cities for comparable development projects. Cities included in the study were Austin, Fort Worth, Frisco, Houston, Arlington, Irving, Plano, and San Antonio.
During the presentation, DSD provided committee members with data that showed the City of Dallas charges a fee of $1,104 for single-family construction of a home with a valuation of $225,000 or a size of 2,500 square feet. The fee is about $50 cheaper than in Fort Worth and almost $700 less expensive than in Arlington.
For single-family construction projects with a $375,000 or 3,500 square feet valuation, DSD charges $1,279, less than $250 compared to Frisco, and $481 less than fees charged in Plano.
Concerning multifamily construction projects with a valuation of $33 million or a size of 350,000 square feet, Dallas once again came in at the bottom of the fee list. The Texas market with the most expensive multifamily permit fees was Plano, with a total cost of $227,000, a nearly 500% increase over the $37,950 charged in Dallas, according to DSD.
Young expressed concern about Dallas being at or near the bottom when it comes to construction project permitting fees.
“We don’t want to be the highest and the most expensive, but we do want to be in the ballpark and able to recoup and pay our employees and get the Enterprise Fund, so we want to make sure we are balanced out,” Young explained during the meeting.
DSD examined permit fees for commercial projects in three categories: retail, warehouse, and office.
DSD charges $7,063 for commercial retail projects with a $2 million or 20,000 square feet valuation, the second-lowest fee behind San Antonio, which charges $6,778. Irving charges $12,000 for a comparable commercial retail project, the most expensive fee charged out of the cities examined in the study. Meanwhile, the total fee for commercial warehouse projects with a valuation of $4 million or a size of 100,000 square feet was $11,247, about $2,200 more expensive than in Austin but almost $49,000 cheaper than in Irving.
As for commercial office projects, Dallas charges $12,064 for permits based on a valuation of $5 million or a size of 50,000 square feet. Dallas came in with a $12,064 commercial fee. Meanwhile, Irving landed the top spot with fee amounts totaling $30,000.
According to Young, a final draft of the fee study has already been completed and will be presented to the EDC before 2024.
“We’re combing through it now, making sure that the consultant can answer all our questions, making sure that we can speak to you guys intelligently on it, and reaching out to our partners to make sure that we didn’t miss anything,” Young said.
“We should be providing the fee study to the economic development committee … in the next couple of meetings — before the end of the year for sure,” Young concluded.
