Reviews | Florida has started penalizing bureaucratic delays. Housing permits have skyrocketed.
Last year, Governor Ron DeSantis (right) signed a bill that fundamentally changes the state’s permitting process for home construction. It requires local jurisdictions to publish not only their permitting processes, but also the status of permit applications online. Transparency removes much of the mystery from what can be an impenetrable branch of bureaucracy.
More importantly, the reforms also created a system that gives cities and counties a strong incentive to approve new residency permits in a timely manner. When a builder or homeowner submits an application to build a new home, cities and counties have 30 business days to process it or request corrections.
If government offices do not respond within that time, the locality must refund 10% of the filing fee for each additional business day of silence. Application fees can vary widely by locality, but the average cost in Florida is nearly $1,000, according to HomeAdvisor.com. If officials request corrections to the application, they have 10 business days to approve or disapprove the resubmitted application. Exceeding this timeframe results in an automatic 20% refund, with an additional 10% added for each additional missed day, up to a cap of five days.
The purpose of this policy is to accuse the government of having delayed the construction of new housing. A study of home sales in Southwest Florida between 2007 and 2017 by the James Madison Institute found that permit delays added up to $6,900 to the cost of a typical home. It’s a de facto tax on Florida families; now the Sunshine State is making cities and towns pay for their own delays.
My own recent research for the Foundation for Government Accountability indicates that policy is already making a difference. This spring, we submitted public records requests to the state’s most populous courts. We asked how long it took them to process new residency permits in the four months before and four months after the policy was enacted in October 2021.
Consider St. Cloud, a growing suburb in the Orlando metro area. In the four months before the law was passed, less than half of new housing permit applications were processed within 30 working days. After the law was passed, about 80% of applications were processed within 30 days, or 182 of 227 permit applications in four months.
In Santa Rosa County, including much of the fast-growing Pensacola area, before the law was passed, less than half of requests were processed within 30 days. In the four months since enactment, the rate has risen to 100% of applications – for no less than 347 new homes.
Although local governments do not provide a breakdown of the percentage of applications approved or denied, other evidence suggests applications are generally approved.
In the years before the new law, the rate of increase in new home construction in Florida was about the same as the national average. Although many factors can influence home construction, and the law was only in effect for part of the year, Florida’s home construction rate in 2021 was two-thirds higher than the national average. Over 30% more permits were issued in Florida last year compared to 2020. Cutting red tape has certainly contributed to the boom.
Today in Florida, thousands of new residency permits are processed faster under this law by bureaucracies who must pay a penalty for dragging their feet. When officials ignore the deadline, Floridians reap the rewards. An Orange County resident received a 60% discount on his permit application fee because the county was extremely late, with a total savings of nearly $4,000 off the total permit cost of approximately 6 $600.
The faster approval process appears to bolster a Florida homebuilding boom that was already underway. Charlotte County saw new permit applications increase by nearly half to more than 1,500 during the four-month window, compared to the same period last year. Volusia County, which includes Daytona Beach, saw a 54% spike to more than 250 requests during that time.
America needs more housing, fast. States can’t do much about rising interest rates, but as Florida has shown, they can certainly do something to reduce barriers to home building.