Denver's city auditor says slow permitting process costs homeowners time, money
A new audit by Denver Auditor Timothy M. O'Brien, CPA is showing that construction plan review errors, unclear instructions, and a lack of manager oversight are increasing costs and slowing down the process for homeowners to get permits for renovation and building projects in Denver.
"This is dangerous for the community and frustrating for homeowners," Auditor O'Brien said in a statement. "If more people start going it alone without approved construction plans, we could have a big issue."
According to the audit, long permit review times are a top complaint for homeowners and contractors. More than half of the people who responded to the survey indicated that long review times made the permit review process more difficult.
In one example provided by the auditor, one survey respondent said delays added more than $24,000 to the cost of a project because of extended payments on rent and mortgage, so they completed the work without a permit. A contractor also told the auditor that they pass additional costs caused by slow permitting down to their clients. One Denver City Council member said their constituents are completing projects on their homes without permits.
According to the auditor, Denver saw a large increase in residential permit applications during and after the COVID-19 pandemic as homeowners started more home renovation projects. That caused a decrease in the number of renovation or construction plan reviews completed on time.
The audit reveals that in 2022, Community Planning and Development reviewers did not complete permit reviews on time 76% of the time. In April 2023, that figure rose to 81%.
Permits are required in the City of Denver anytime homeowners want to make certain changes to single-family homes, duplexes and additional units like basement apartments.
The auditor said there are "serious areas of poor communication and inconsistencies" and that contributing factors to the slow permit approval process include "insufficient manager oversight, inconsistencies in data, inaccuracies in reviews and feedback, and lack of a formal training program."
"Inconsistencies and errors in the process for issuing home renovation permits could lead more people to do the work without any approval at all," O'Brien said in a statement. "That puts residents and the community at risk if something were to go wrong during construction or sometime in the future."
The auditor believes delays in reviewing project plans could create future safety issues for homeowners while negatively impacting housing affordability by increasing the cost of home construction and repair projects. Likewise, errors by staff can occur more frequently and are not always caught promptly which can result in more delays.
The audit revealed that 10 out of 55 people said city staff made an error in reviewing their application which can result in homeowners paying additional fees if more than three resubmittals are needed. When an applicant resubmits, their project goes to the back of the line for review.
"The time it takes to get a permit approved could depend on which reviewer gets assigned to your application," O'Brien said in a statement.
Additional Information from the Denver City Auditor:
Informal and inaccurate communication from city staff can also contribute to delays and added costs in the permitting process. Due to informal communication with homeowners and contractors, Community Planning and Development has caused:
· Outdated and unclear online guidance for permit applicants.
· Inconsistent and sometimes confusing plan review comments.
· Difficulties in homeowners and construction contractors contacting department staff with questions.
· The department not using feedback from homeowners and construction contractors to improve the residential permitting process.
· Difficulties in residential plan review staff getting information from other city permit review teams.
Eleven of 55 homeowners and construction contractors who responded to our survey expressed frustration with inconsistent review comments, with one saying the likelihood of their project getting approved depended more on the reviewer they were assigned than on the project itself.
Fourteen respondents also said that when they resubmitted their plans, they either received additional review comments that had not been communicated in earlier reviews, were told to submit items that were already included in their plans, or identified mistakes made by plan reviewers. They said this caused them to go through unnecessary application resubmittals that delayed their permit approvals by weeks or months.
Without formal processes for communicating with applicants and other review teams, errors will continue to affect the permit application process, which can lead to longer review times and added costs for homeowners.
Additionally, we found inaccurate data is leading Community Planning and Development to report permit processing times as shorter than they really are — to both management and the public.
"Given the breadth of the problems with residential building permit reviews, the department is going to need to work hard and have plenty of resources to make improvements," Auditor O'Brien said.
The department needs to have a consistent approach for staffing and data to ensure the necessary resources, training, and consistency are available whenever surges in permit applications happen.
We made 20 recommendations to help the department improve its training, consistency, management, and data.
Unfortunately, managers chose to disagree with three of our recommendations related to ensuring reliable data and contract monitoring to avoid errors in permit review. We hope the department will act on all of our recommendations to help improve the experience of building permitting for our city's constituents in the future.