California, one of the largest and wealthiest states in the nation, has an ongoing housing shortage of approximately 185,000 homes  annually. In the past four years home prices have increased by more than 30% while building permits have declined year over year. Why? Because the cost of what used to be a simple parcel map is more than $100,000. Tract maps, conditional use permits, zone changes, general plan amendments and environmental studies can cost hundreds of thousands of dollars or more. Time of process can run between 1.5 years to 10 years, or longer. These costs do not include government mandated improvement conditions and mitigation requirements. California needs to reform its 40 year old entitlement process which is choking in regulation and extraneous demands.

Expediting the entitlement process could result in savings in time and money to all involved. Hopefully these savings would be passed along to the public resulting in more homes built at less cost. Less cost for housing could also be the genesis for more built homes and affordable housing. Also, it could reduce the state’s annual emigration of those unable to afford a home.

Its no wonder there is a housing shortage. Studies usually required for most projects include: noise, soils, greenhouse gas, archaeology, agriculture, drainage, flood, environmental, anthropology, grading, fire and access requirements, landscaping, engineering studies, architecture and more. Projects are processed by individual offices of expertise within a planning department. If one office decides to make any change in the project application, then all other offices must review and approve each change within its purview. Generally, most applications are reviewed by 5-10 offices within the planning department. This process can go on with delay after delay, costs and more costs. When these reports are finally approved, very few people read them.

To expedite the entitlement process would require bringing more competition to the process. Presently, the process is monopolistic. A few suggestions are:

• Establish an office of Director of Planning, with a board of directors, responsible for all entitlement processing. Set fixed costs and deadlines for all applications.

• All projects to be awarded to public and/or private contractors on a bidding basis. Upon completion of a project it would be audited for its costs and deadlines.

• In lieu of custom studies for each individual property, develop regional data banks containing all pertinent information from previous studies and available online information and research. This could significantly reduce environmental costs.

• Establish an ombudsman office.

All projects would have to be approved by the respective governmental Planning Commissions and City Councils or Board Supervisors.

Government IS responsible for the high cost of homes and the created housing shortage. After 40 years, it is time to reform.

About the Author

Patrick Miller, CCIM | Principal
Lee & Associates, Inc. - NSDC

Mr. Miller is a Founding Principal of the Lee & Associates North San Diego County office. He has 47 years of full-time real estate experience, and specializes in the sale of land and investment properties. He has negotiated sales transactions totaling in excess of $1.5 billion, and $250 million in leases.

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