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Philadelphia Builders Peg Revitalization Efforts on Streamlining City’s Zoning and Permit System

Philadelphia was of little interest to private developers in the 1980s and 1990s, according to the association’s report, “If We Fix It, They Will Come.” The city’s middle-class made up only 19% of its population during those years, a smaller share than in 75% of the nation’s largest cities, but that situation is ready to change, the report says, provided that ways can be found to accommodate the new housing that will be needed.

For the first time in several decades, private residential developers are taking a hard look at opportunities in the city, the report says. Roadblocks to new housing in the suburbs have become formidable. “In addition, the city offers many advantages to developers, including existing sewer and water infrastructure, no fees for reviewing development projects, available land, a pent-up demand for new housing, a welcoming attitude towards growth and extraordinary amenities such as parks and cultural ventures.”

Philadelphia Mayor John Street's $1.6 billion Neighborhood Transformation Initiative calls for 16,000 new privately built houses in the Philadelphia market and the rehabilitation of another 2,500 — an ambitious goal for a city that was able to deliver fewer than 1,000 single-family and multifamily units as recently as 2002.

Standing in the way is a 40-year-old zoning code and a permitting process that involves up to 14 different city agencies and boards, adding significantly to the costs of a development project, according to the report. “Philadelphia must streamline its current maze of bureaucratic requirements so that quality development can proceed swiftly and predictably.”

With about 60,000 abandoned properties to deal with, Philadelphia is following in the footsteps of cities like Baltimore, Chicago, Milwaukee and Detroit, which have made modernization of their zoning and permit systems a top priority, the Philadelphia builders say.

“The cities who have invested in a streamlined process have seen up to a 400% rise in private market investment, a 60% decrease in government costs to regulate construction and an enhanced reputation as modern, business-friendly cities,” the builders report, citing research from the National Conference of States on Building Codes and Standards on more than 150 reform efforts around the country in the past eight years.

Cities that have tracked the results from streamlined permitting efforts in the early 1990s have reported significant savings to local government and home builders:

• San Diego’s Process 2000 permit review program saved government $10 million and customers $3.5 million in its first four years.
• The Express Service program in Raleigh, N.C., cut government and building industry costs by 25%.
• The 1997 adoption of Phoenix’s Customized Plan Review system reduced the staff time needed for plan review of large construction projects of 5,000 square feet or more by 50%.
• Streamlining in Los Angeles enabled to the city to handle an 88% increase in construction activity with only a 1.5% increase in staff time. Reforms there also saved the development sector tens of millions of dollars by reducing wait time for a permit applicant from two to three hours to seven minutes, reducing plan check time from 10 weeks to an average of 10 days and reducing inspection waits from four to five days to 24 hours.
• Chicago has found that better regulation has attracted developers interested in reusing abandoned land and rebuilding neighborhoods. In 2003, the city added $78 million to its tax revenue while creating 3,000 new jobs as a direct result of redevelopment of vacant and blighted property.
• St. Paul, Minn., added $20-$30 million in revenue by bringing abandoned properties back on the tax rolls and added 50,000 new residents and 40,000 new jobs.

To start off the reform process, the building industry association has created a guide to lead developers through each step of the current system. Over the longer-term, the builders hope that the city will create an online information tool modeled after Chicago’s Permit Wizard, which allows users to obtain detailed, site-specific project information about the steps they need to take before beginning a project.

After entering an address and responding to a brief series of questions, the Wizard provides a comprehensive set of requirements for obtaining a permit, including all of the forms that must be completed, in a downloadable form; descriptions of the steps in the process; and an explanation of the documentation that will be needed.

Among the deficiencies of the current system in Philadelphia, there are conflicting requirements among the agencies and boards with which the developer has to negotiate; no time frames are provided for the review; and no clear-cut review standards are provided, the report says.

There is no single point of entry into the development process, the Philadelphia builders complain. The most commonly used gateway — Licenses and Inspections — serves a large variety of customers on a first-come, first-served basis with no distinctions among the types of permit seekers.

“A developer seeking to build a $10 million subdivision in West Philadelphia waits in the same line, goes to the same counter and sees the same personnel as a business seeking approval to place a dumpster,” the report says. “As a result, it is common for a development professional to arrive at L&I early in the morning with a book and lunch in hand to wait the day away just to submit an application or pick up an approved permit.”

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