Development activity in Dallas plummeted in June, with residential permit approval hitting its lowest level of 2023.
Dallas’ Development Services Department (DSD) is still managing the alleged fallout from disruptions to the City’s building permit process caused by the purported ransomware attack on City servers in May.
With server issues continuing to plague many components of the single-family development process through June — such as payment submissions and the ProjectDOX software — DSD ended up seeing the fewest number of permit submissions and the lowest issuance rate since before 2020, according to the latest data from the City’s residential permit activity dashboard.
DSD reported 84 submissions and 55 approvals in June, logging 39.5% and 52.5% drops, respectively, from the month before and the lowest number in 2023. Of the 84 permit applications submitted in June, only about 21% were actually issued. Fourteen paper permit submissions were not included in the monthly activity analysis.
Although permit activity slowed during the month, the median issuance time actually dropped by two days. Permit applications spent a median of 25 days with DSD in June before receiving approval, down from the 27 days reported in May but nearly double the time required in March and April.
Permit approval times under Dallas City Manager T.C. Broadnax have often been a point of contention for local builders and developers. As Phil Crone, the executive officer of the Dallas Builders Association (DBA), has previously said, “Every day of delay costs $200 to $300 per project.”
Crone will be stepping down from his position as executive director of the DBA later in July to take up a national position as vice president at Leading Builders of America, as reported by The Dallas Express.
While permit review times have come down from the highs seen during the COVID-19 pandemic, some review times continue to fall outside DSD’s recommended performance window.
As of July 1, DSD had a total of 342 residential building permits in its queue, which includes all active permits regardless of the date submitted. However, DSD also has 326 in-queue permits that were not included in the activity analysis for June due to having no applicant activity within the last 90 days.
Although DSD began the year with positive momentum and a cleared queue, that momentum seems to have quickly fizzled out as the year progressed. Halfway into 2023, DSD was still struggling to find a consistent balance between permits submitted and permits issued.
On a year-to-date basis, DSD reported having a median of 139 submissions and a median of 171 issuances, which means that many of the permits approved in 2023 were for applications submitted in a prior year. For example, of the 55 permits that were issued in June, seven were not applied for in 2023.
DSD was still reporting intermittent server issues from the ransomware attack at the end of June, so it is unclear if ongoing problems will persist in July.
However, considering the Federal Reserve’s forecast of two more interest rate increases, it is likely that development activity will continue to slow as homebuilders weigh the cost of materials and demand and homebuyers weigh the impact of higher mortgage rates.
Residential permit data for July will be released on August 1, 2023.
