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An Easy Solution to Stimulating the Local Economy and Saving Money for Local Governments

Throughout the country, it’s no secret that state and municipal government are facing hard times. Some have already filed for bankruptcy protection. Others have been forced to raise taxes or cut services dramatically in order to keep solvent.

As a local practicing architect and member of the American Institute of Architects, we believe there’s another, better way. It comes under the not very sexy strategy called “expedited permitting.”

The AIA believes that expedited permitting increases tax revenue for local jurisdictions and reduces costs for the design/construction industry, while also providing localities with an incentive option to promote sustainability and other beneficial land use policies.

Delays in permit approvals are costing local governments millions of dollars in lost revenues as projects that take longer to come on line cost localities tax money. Most projects have fixed budgets today, and so every dollar saved on approvals is typically moved to the construction phase, resulting in better quality buildings that are often more sustainable. Most importantly, it gets projects into the construction phase sooner, which generates local jobs.

An AIA report, “The Economic Impact of Accelerating Permit Processes on Local Development and Government Revenues,” shows that communities with a more efficient building permitting process can gain millions of dollars in tax revenues and significantly bolster their economic development. The study examined the relationship between building permit processes, local economic activity, and government tax revenues. The study concluded that the implementation of a more responsive permit process over a five-year period could result in a 16.5 percent increase in property taxes and a 5.7 percent increase in construction spending. Additionally, expedited permitting is one of the most popular green incentives among developers.

Whatever specific approach is used, the AIA strongly urges local government officials to support expedited permitting and implement programs that incorporate this policy. This tool is also valuable from a strategic standpoint to encourage green building and sustainability initiatives in exchange for a streamlined process. And it’s a tool that local governments have at their disposal without having to resort to draconian cuts to much-needed public services. As a local practitioner and small business owner I know that this technique benefits the full range of the design and construction industry as well as local governments and taxpayers. My professional association, the AIA, is now developing more information on this topic for use by local governments.

This is and easy solution to more jobs, better buildings and lower costs for government.

Joe Smith is President of AIA – state.