City Residential Permitting Processes – Probably not as Slow as You Think

Photo Mario Recchia

By my count, these 7 cities and towns had approved about 250,000 entitled housing units by the fall of 2021 with several thousand more at some point in the construction process…

Let’s start with the obvious, there are more people than housing products across most if not all of Arizona.

Economic Development goals siting new companies, encouraging expansion of Arizona companies, and children growing up has led to low inventory and high demand for housing of all types.

One of the criticisms I hear regularly is that cities and towns have made it too hard to get housing approved and it takes too long.

In August of 2021, WeSERV Government Affairs sent questionnaires to several cities and towns in Pinal County, Maricopa County West Valley and Maricopa County Southeast Valley. We specifically asked about the process and timelines for approving and entitling land for residential use, and the estimated number of purchase and rental housing units.

We were most interested in identifying how the cities and towns viewed their processes and how our commercial and residential REALTORS® experienced the process. In some cases, newly created streamlined processes were indeed saving time and money for all concerned. In other cases, we were able to identify gaps or hiccups in the process that can only be known by experiencing the process first hand. When we identified a problem in the process, we would send a note to the city or town detailing the experience with suggestions for smoothing out the process.

During 2020 and 2021 numerous cities and towns were intent on reviewing and updating their LDO (Land Use Development Ordinance) and their approval processes. Some cities introduced the ability to submit plans online 24/7. Others updated ordinances so that once a builder went through the approval process for home products, that builder could forgo future product approval for already approved home product built elsewhere in the city or town for the next 10 years.

City staff reviewed various development fees at stakeholder meetings striving to keep fees the same or slightly lower overall so that increases in one fee area would not impact the overall fee amounts.

Mayors and their cities confronted state agencies like ADWR, regarding parcels with already granted Certificates of Assured Water Supply that were being prevented from home building approval.

All the while cities and towns, just like builders, retailers and commercial companies everywhere, were dealing with the limitations of Covid-19 policies that impacted labor and materials.

Currently a popular accusation is that cities and towns have prevented the necessary building of over 200,00 housing units. WeSERV disagrees on both the number and accusation.

In the WeSERV housing study The Web of Housing Solutions: Finance and Policy Consideration to Improve Access and Affordability in Arizona, WeSERV teamed up with Jim Rounds and Rounds Consulting Group to create a report based on private sector solutions to the housing stresses we are seeing.

In that study we identified a shortage of between 40,000 to 80,000 housing units based on some very Arizona specific criteria.

Cities and towns have been approving residential projects quickly over the past two years. We can see that since Planning & Zoning meetings and City/Town Council meetings are routinely busy with neighbors asking questions and voicing concerns about proposed housing projects. A close second topic of conversation is the infrastructure needed to support ever growing cities and towns.

We have watched State Land sales increase dramatically over the past two years, much of which was identified as residential. The fevered bidding increased the land acquisition costs rapidly.

So, I thought it would be helpful to look back at 2020 and 2021 to see if city and town processes were truly stalled. Let’s start with the letters WeSERV sent to cities and towns and some of the responses. By my count, these 7 cities and towns had approved about 250,000 entitled housing units by the fall of 2021 with several thousand more at some point in the construction process.

City of Maricopa – September 7, 2021:
65,000 entitled housing units, 24,000 built. This number did not include thousands of entitled units in communities within the city’s planning area, but outside the city limits.
As of December 20, 2022 the number of entitled housing units had increased to 73,246 with only 26,100 units built. 2,866 multifamily with 1,100 built. 70,380 single family with 25,000 built.

The city estimated in September 2021 they would see 2,000 housing units a year built.
Click Here to Learn More.

Casa Grande – September 1, 2021
Casa Grande offers a free pre-development review by the development team with the developer and the utility company. Permitting techs help homebuilders at plan submittal.

Raw land needing re-zoning – allow 120 days. Platting – 120 days, and Housing product review if it is a PUD is 45 days. Entitled land is 15 working days.

As of September 2021, Casa Grande building fees had not changed. Impact fees had decreased. Residential fees had decreased on average $1,400 per unit.

The city had added Projectdox (online resource) for home plan submittal. This tool is used when showing the location of the house on the lot. This is a 5-day review period.

As of September 1, 2021 Casa Grande had 24,000 entitle housing units. They estimated 3,000 purchase units and 3,000 rental units would be available within 24 months.

Queen Creek – September 2021
Raw land entitlement takes 6-12 months. Platting takes 6-12 months depending on scope and scale of project as well as responsiveness of design team. Entitled land takes 6-12 months before dirt moves. Plats are reviewed and approved along with all improvement plans.

Queen Creek has a pre-application review process. The developer receives initial feedback that may impact the project. Some permits are allowed to be submitted “at risk”.

As of November 2019, Queen Creek had modified impact and water/wastewater capacity fees resulting in a net reduction of residential fees.

The Town moved to an online platform so design teams could submit plans 24/7, 365 days. Plans are reviewed online.

As of September 2021, the Town had 9,000 lots either completed or under construction in active housing developments. The Town had over 25,000 additional entitled lots.

Queen Creek estimated it had issued 1,607 residential purchase product permits in FY 2021 and another 1,801 residential permits on FY 2022. The Town estimated 1,500 rental units under construction with another estimated 700 entitled rental units.

Glendale – June 1, 2022
As of June 1, 2022 Glendale had 7,878 multifamily units in the zoning, permitting or under construction phase. There were over 4,600 single family units developed at the same time.

Infill single family detached and multifamily projects were on the upswing. 24 projects bringing 3,050 units were in zoning and design review. Another 30 projects bringing 4,828 apartment units were in various stages of construction.

At the time 1,200 affordable (government program housing) multifamily units were in review or permitting. 4 large multifamily affordable government program housing projects were in permitting.

Additionally, the city held public housing workshops over the course of 2022.

Peoria – September 2, 2021
Peoria’s fees had not increased or decreased as of September 2, 2021. In some cases, the City was able to provide expedited services upon request based on workloads.

The city estimated 2,500 purchase housing units would be built over the next 24 months.

Plan review times are based on a 4 day work week. New Multifamily residential was taking between 4 and 14 days to review. New Manufactured homes were 2-3 days and custom homes were 8-18 days.

Surprise – April 25, 2022
As of April 25, 2022, Surprise had a variety of multifamily residential under construction. Townhomes, age restricted residential, luxury and other types totaling 10,090 multifamily units under construction, representing 45 projects. Single family residential was up as well with 2,058 approved units from July 2021 to April 2022. 1,211 homes had been completed over the same time period.

Surprise participates in the Cost of Living Index (COLI). At the time Surprise’s cost of housing was below the average housing cost in Phoenix, Flagstaff, Prescott, Lake Havasu City, Kingman and Tucson.

Surprise created the Human Service and Community Vitality Department which addresses affordable (government program) housing amongst other concerns. WeSERV Government Affairs attended a large stakeholder meeting in 2018 that served as a guidance and information gathering tool for the Department. In 2021, 100 affordable units were completed in the Surprise Heritage District. An additional 4 single family affordable home projects were in discussion and another 99 units of senior housing with an expected delivery data of 2025.

As of April 2020, Surprise had 53,836 entitled housing units and another 78,081 housing units proposed or under construction.

As of April 3rd, 2023 Surprise reported several multifamily and single family home permits complete between Dec. 1, 2022 and March 31, 2023. The city had issued more than 64 multi family permits for construction and 181 permits for construction in the month of March 2023.

In the single month of March 2023, Surprise had six multifamily projects under permit review and more than 70 single family detached units under permit review.

Between December 2022 and March 2023, Surprise had numerous residential projects being considered and approved with meeting dates scheduled. Several other projects were scheduled for P&Z or City Council meetings as active project reviews during March 2023.

The Surprise Single Family Residence Permits graphic shows single family house permits issued vs. completed for FY 2017 to first quarter 2023. At no time between FY 2017 and FY 2022 did house completions equal or exceed permits issued. In FY 2022, 58% of issued permits were completed.

Avondale – August 27, 2021:
As of August 27,2021, Avondale’s plan review was 12 business days for the first review and 8 business days for the second.
See the Jan 2021 construction status map for Avondale Here.

Because there was an upswing in projects of all types, there was a 2-week backlog at this time. Avondale has a pre-application process for housing plan reviews which is a 3-4 week process. Once the pre-application process is completed, the builder submits the house plan design for review which takes 12-18 days.

The city requires the pre-application review so the city can complete a cursory review, provide comments, and next steps can be outlined. It is during the pre-application review process that possible issues can be identified and solutions created saving the builder and the City time.

Over the course of the previous five years, development fees had decreased. Avondale was accepting electronically submitted documents for projects so that builders could submit on any day at any time. Avondale had a reputation for quick plan/permit review time frames.

As of August 2021, Avondale 5,300 SF residential units under construction and another 3,619 planned. They had another 4,710 multi family units built with 541 under construction and 1,069 planned. All within a 24-month period.

The city conducts development roundtables quarterly, hosts business summits, and other economic development events. Learn more at Avondale Edge.

The point is… By the Fall of 2021 cities and towns had hundreds of thousands of entitled residential units.

Cities and towns are, and have been, approving housing permits. Their costs have generally stayed the same or gone slightly down. Delays are from several sources, including builders and developers, supply chain woes, labour shortages and commodity shortages.

At the WeSERV Government Affairs Meeting on April 5, 2023, members created a new task force – the New Build Task Force. Our goal is to provide members and their clients with helpful information and resources they can use when buying a new home or negotiating with a new home builder.

If you are a member of WeSERV (REALTOR® or Affiliate) and would like to be a member of the task force, let me know.