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Breakthroughs: Successful Local Strategies for Affordable Housing

March 2007
Volume 6, Issue 2
 
          

Reducing Regulatory Barriers
through Electronic Permitting

This is a picture of a laptop computer.
Obtaining a building permit can be a complex process involving a significant number of resources. A news release from Oregon's Department of Consumer and Business Services (DCBS) explains that navigating the necessary steps to obtain a permit requires a significant amount of time, which could be reduced with state involvement. Electronic Permitting Systems and How to Implement Them, a report from HUD's Partnership for Advancing Technology in Housing, finds that state governments usually avoid becoming involved in local permitting processes. This article will explore how state-level efforts, such as those of Oregon's e-permitting pilot program, which is expected to become a statewide venture, are becoming increasingly involved in permitting.

The History of E-Permitting in Oregon

Senate Bill (SB) 713 created Oregon's unique e-permitting program and streamlined the permit process by implementing a signature exemption for electronic applications. The legislation became effective in September 2003 and was instituted as a pilot program in the Portland metropolitan area, enabling the DCBS to assess the programís outcomes. According to Robert C. Wible, Director of the Alliance for Building Regulatory Reform in the Digital Age and an authority in the field of electronic permitting, Oregon's program is distinctive because it "coordinates and blends the state e-permitting system with existing local on-line permitting systems within the state."

After the successful implementation of the e-permitting pilot program in the Portland area, House Bill (HB) 3097 removed the sunset provision of SB 713, which allowed the DCBS to study, and later implement, a statewide expansion of the electronic permitting program. Wible explains that this expansion will not hinder Oregonís local jurisdictions, because it works with current online programs and does not preclude jurisdictions from creating an e-permitting system in the future.

House Bill 2405

In January 2007, HB 2405, which expands e-permitting from the Portland metropolitan area and other participating jurisdictions to localities throughout the state, was introduced to Oregon's House of Representatives. "What makes the Oregon e-permitting initiative so important is that it is more readily replicable in states with statewide building code programs," Wible explains. The legislation also streamlines the regulatory permitting processes by creating a one-stop e-permitting website.

House Bill 2405 recommends making the e-permitting system available to all municipalities that administer or enforce building inspections and authorizes the DCBS to oversee the process of information exchange. The legislation establishes a permit surcharge to offset the administrative and maintenance costs associated with the e-permitting system, and allows the DCBS to create standardized permit processes and building codes. HB 2405 also promotes cooperation between state and local governments. The state hopes that such intergovernmental collaboration will result in a system within the e-permitting site that allows contractors to schedule and track inspections. The website will also provide contractors with assistance in determining the department to which they need to submit their permits.

Other Statewide Electronic Permitting or Planning Systems

Michigan's Department of Information Technology created the Michigan Timely Application & Permit Service (MiTAPS), a program that allows for the submission of applications, as well as online tracking and payment. It also assists users with finding local contacts. New Jersey's Department of Community Affairs created an in-house electronic permitting system that is available to local building departments. According to Electronic Permitting Systems and How to Implement Them, both California and Indiana have in-house electronic plan review systems that streamlined the states' application processes. Indiana's system eliminated the backlog of applications received by the Department of Fire and Building Services and decreased the project review period from 45 days to 10.

Conclusion

Multilayer permitting and regulations that vary by jurisdiction can make development challenging. To ease the process, Oregon created a pilot program for e-permitting that proved successful. House Bill 2405, recently passed by Oregon's House of Representatives and scheduled to be heard by the Senate this month, turns Oregon's pilot program into a statewide venture and a model for states looking to create electronic permitting programs in the future.

 

Santa Cruz's Accessory Dwelling Unit Program


A clock tower located in a downtown area.
Santa Cruz is a popular beachside city located along California's central coast, approximately 70 miles south of San Francisco. The scenic views, local university, and booming job market in nearby Silicon Valley make the city a desirable place to live, and the resulting demand for housing has contributed to the area's affordable housing shortage.

In 2006, the median-priced single-family home in Santa Cruz County was $746,000. Today, only 6.9 percent of current residents can afford the median-priced home (based on housing that costs no more than 30 percent of a household's monthly income), making Santa Cruz one of the countryís most expensive places to live. The limited amount of buildable land has forced Santa Cruz officials to implement innovative strategies to promote affordable housing. This article will highlight the city's Accessory Dwelling Unit (ADU) Ordinance and report on the program's success since its inception in June 2003.

ADU Goals

An accessory dwelling unit, often referred to as a second unit, granny flat, or in-law apartment, is a separate living space that includes kitchen, sleeping, and bathroom facilities. The ADU can be attached or detached from the main residential structure, but is located within the same single-family lot.

Santa Cruz adopted their ADU program to increase the affordable housing supply while providing homeowners the added benefit of obtaining extra income. The city also seeks to minimize the impact of growth by providing more rental housing within the city's developed core, to preserve the surrounding green belt, and to foster public transportation through infill development. The program encourages ADU development on single-family lots throughout the city and discourages the development of illegally constructed units, which can pose both health and safety threats to residents.

ADU Ordinance

The ADU Ordinance mitigates the potential impacts that accessory dwelling units might otherwise have on the surrounding neighborhood by regulating the design, location, and size of the structures. To ensure that an accessory structure is compatible with the neighborhood as a whole, the ordinance calls for designs that are similar to the existing residence in terms of architectural style and construction materials. ADUs are permitted on lots that are 5,000 square feet or greater, and do not require a public hearing if all applicable development standards are met.

The ordinance also provides incentives to encourage the construction of accessory dwelling units. For example, the city waived all covered parking requirements, allowing residents to convert their garages into accessory dwelling units. To address potential parking issues, the city allows three parking spaces in the front or exterior yard setback, and allows tandem parking spaces for the primary residence and accessory dwelling unit. Finally, the ordinance provides development fee waivers for accessory dwelling units that are made available to low- and very-low-income households.

ADU Assistance

The ADU Development Program has three components to assist homeowners interested in developing an ADU on their property. The city offers a Wage Subsidy and Apprentice Program providing wage subsidies to licensed contractors employing apprentice workers, as well as an ADU Loan Program that grants Santa Cruz residents loans of up to $100,000 at a 4.5 percent interest rate. The third component, the Technical Assistance Program, provides homeowners with the tools necessary to plan for the development, design the structure, and expedite the permitting process.

As part of the Technical Assistance Program, the city of Santa Cruz hired local architects to design seven different ADU prototypes, including garage conversions, two-story units, and detached units. The prototypes are compiled in the ADU Plan Sets Book, which provides homeowners with information on designing their own ADUs. The plans allow design flexibility and, if only minor modifications are needed, homeowners may be able to modify the plans themselves, thus saving time and money. Additionally, the city drafted a step-by-step ADU Manual to assist homeowners in understanding neighborhood compatibility, relevant zoning information, and the permitting process.

Conclusion

In 2001, Santa Cruz granted eight building permits for accessory dwelling units. Since the introduction of the new ADU program in 2003, the city has approved over 170 building permits for accessory dwelling units. This success has prompted national recognition of the ADU Development Program, which serves as a model for other jurisdictions looking to increase their affordable housing supply through accessory dwelling units.


Update: Austin's S.M.A.R.T. Housing Policy Initiative

Houses located along a river.
The S.M.A.R.T. Housingô Policy Initiative, first described in RBC's January 2003 edition of Breakthroughs, was adopted by the Austin, Texas City Council on April 20, 2000. The initiative has proven to be a great success, in that it demonstrates how an affordable housing policy built on a voluntary, market-based incentive program can significantly increase affordable housing production. By outlining desired public benefits and creating a process to provide certainty and advocacy throughout the development process, Austin has successfully encouraged the development community to respond through increased production.

"First, identifying regulatory barriers was a key to our success. Now, Austin is looking to reexamine the mix of incentives in light of changing market conditions," said Paul Hilgers, director of Austin's Neighborhood Housing and Community Development Department. ďAny locally designed program to reduce regulatory barriers must have the support of elected officials, the affordable housing stakeholders, and the building and development community."

In the first year of S.M.A.R.T. Housing, officials estimated that they would receive 600 applications for the new program, but the response was staggering - over 6,000 individuals submitted applications. The most recent numbers indicate that, since the program began, more than 8,200 units (3,000 single-family and 5,220 multifamily units) have been completed and are now occupied. Seventy-one percent of these units are considered reasonably priced or serving families at or below 80 percent of the area's median income. Additionally, the city has over 1,750 units currently in the development review process and approximately 1,750 under construction.



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