Dallas developers could benefit from new legislation that allows certified architects and engineers to approve site plan reviews and building inspections after a designated period of time.
Dallas has struggled for years to streamline its development permitting process. Under City Manager T.C. Broadnax, the average turnaround time for a single-family permit has climbed as high as 57 days in November 2022, as previously reported by The Dallas Express.
House Bill 14, introduced by Rep. Cody Harris (R-Palestine), is intended to streamline the development process in Texas by allowing state-licensed and certified professionals, such as architects and engineers, to approve plats, site plans, and development inspections if a regulatory authority fails to perform required reviews or inspections 15 days after the prescribed deadline.
According to Nicole Nosek, founder of Texans For Reasonable Solutions (TFRS), a non-profit organization focused on developing common sense solutions to problems such as housing affordability, bureaucratic delays and unpredictability in the building process drive increased rents and purchase prices for single-family homes throughout the Lone Star State.
“Major Texas cities currently struggle to meet their permit deadlines and maintain their staff,” Nosek told The Dallas Express. “H.B. 14 not only helps home buyers with lower priced housing, but it helps cities manage their workload for those that don’t have the resources to handle permit applications.”
On a percentage basis, regulations imposed by government agencies at all levels of the development process account for nearly 25% of the final price of a new single-family home, according to a May 2021 National Association of Home Builders study.
A breakdown of the regulatory cost imposed on developers shows that 10.5% of the final house price was attributable to regulation during the development of the lot, while 13.3% was due to regulation during the actual construction of the home.
“In plain numbers, that’s $93,870 in added costs for an average priced home of $394,300,” TFRS explained in a Q&A provided to The Dallas Express. “When these burdensome regulations, many of which are superfluous, add roughly six months in delays to construction timelines, Texan home buyers and renters are stuck paying up to 5% in increased costs for every 3.5-month delay.”
When it comes to meeting a construction deadline, time is money, according to Dallas Builders Association executive director Phil Crone. For each day of a delay, developers add on about $200 to $300 of extra costs per project, Crone previously told The Dallas Express.
Dallas’ Development Services Department’s median turnaround time in mid-year 2023 was about 35 days for most single-family projects. The average for larger commercial projects was even longer at around three to four months, according to historical data from the City, as previously reported by The Dallas Express.
“Every hitch and delay in the development process, from reviews to supply chain to available labor to financing to inspections, adds to the final cost of housing, and every increase in cost leads buyers out of the market,” HB 14 says in a description of the bill’s background and purpose.
Under the leadership of City Manager Broadnax, DSD has struggled to handle the City’s shift to an online permitting process, as well as limitations on staffing and resources. DSD has thus often failed to achieve review times within its published performance goals.
If action at the state level effectively reduces such regulatory delays, TFRS suggests that renters could see a relief of about 5% on their rent.
TFRS’s enthusiasm for HB 14, however, has not been universally shared.
In a letter to its representatives in the Texas Legislature, the Town of Flower Mound asserted that it was “concerned with the apparent lack of input from, and participation of, local municipalities, and professional organizations such as the Texas Chapter of the American Planning Association (TXAPA) prior to the drafting” of HB 14.
The Flower Mound Town Council wrote in April that “TXAPA offered … feedback for H.B. 14 and was ignored.”