Crazy permit costs

[BigWarehouse]

The building inspectors and people working at building office all have to get paid somehow.

Inspection fee is a minimum of $55. That is pretty standard around the country. That will MORE than pay for the hour it might take the inspector. Apparently some places have free inspections but that is extremely rare...

I'd also guess they don't come out too far ahead on property taxes taken in.

If they didn't, then they wouldn't give me permission to do it in the first place! Current property taxes are $178/year. When I'm done, probably closer to $10,000 per year total. They will make out like bandits!

 

[driftpin]

South Florida is a desirable place to-live, judging by the immigration of people to the region over the years. Florida in-general is somewhere that lures Rust Belt residents south. I was one of them. With that migration come many infrastructure costs, and is one of the ways by-which such development occurs. Having worked as a planner in south Florida, I saw how the processes occur in the development management division of the second most-populous county in Florida.

Impact fees allow the infrastructure costs to be collected when the process of platting the land happens, when it is developed for its intended uses, and when individual parcels are sold to the end-user. All those reasons why government happens, drive the collection of development and impact fees.

An example: you buy a house built as a MCM (mid-century modern) which usually means here in south Florida a ranch-style single family detached dwelling (SFR-single family residential). Assuming you haven't taken-on the trying task of doing this in a "historic preservation" area, your procedure is fairly-straightforward. Submit your plans, sealed with wind-load calcs for wall forces and uplift, foundation (soil tests) and meeting the zoning requirements, etc., and you should get your permits to build. However, let's say that between the time you purchase the 'tear-down' SFR and do raze the parcel, leaving a bare-lot of record, which is taxed at a lower rate than a developed lot, the economy has a 'hiccup,' and you decide not to-build, what has happened? The jurisdiction has lost a higher-taxed developed property off the tax rolls. The neighborhood has an empty parcel where previously a family could live. The school system has fewer potential students, fewer wage-earners are contributing taxes of all-sorts to the local economy. No income taxes, lower property taxes, no fees for usage of government-operated facilities by the now-absent residents, less usage of utilities, despite the costs of installing them.

The developer says, "we're going to ride this recession out," meaning, he's not going to develop in a real-property downturn market. He's waiting until the market returns, when property values are on the rise, when people have money to spend on homes with more amenities, and his profit margin is better.

I believe the timeframe for impact costs being forgiven is 18 months, from time of demolition. Get a building permit in that timeframe for that replacement new dwelling on the SFR 'tear-down' parcel, and you don't have to pay impact fees. This can provide the developer with considerable savings. Overshoot that window of 'forgiven' impact fees and the impact fees are due at a rate which is probably five-figures by-now, and which will of-course be passed-along to the final purchaser of the new home. Impact and concurrency fees are due before plans are approved.
http://www.broward.org/Planning/Development/FAQs/Pages/Impact-and-Concurrency-Fees.aspx

When you live in an area of nearly seven million residents (US Census Bureau estimate 2018) Miami-Dade, Broward, Palm Beach Counties), which has a population total of more-than many states, there are a lot of governmental services to pay-for. That is where the impact and concurrency fees help to maintain the infrastructure, and to pay for improvements.

Personally, I would rather deal-with the possibility of windstorms a few times a year, than to sit inside for months getting 'cabin-fever,' and hoping that Punxsutawney Phil sees his shadow, that spring happens early, freeing us from frigid record temperatures, snow, ice, and heating bills.

As a licensed plans examiner and a Life Safety Code inspector, I am familiar with the purposes of the codes in-place to protect the population. I would rather live with-them, than live without them, because of the safety which comes with compliance. The fees are part of the package. With enough input to local officials the fees may be modified.

As-to large-scale developments, it's not uncommon for the local governmental jurisdiction to assemble a package of infrastructure improvements to entice a developer to choose a site for their project. Utilities, roadways, water management, lighting, essential services, all and more are areas where the local government may make 'in-kind' contributions to see a developer complete a prospective project.

However, if the local government doesn't pay-attention to what they agree-to, the developer may take-advantage of the lack of oversight and take compensation beyond what the government intended. Every step of the way, the review of the development process needs to be carefully monitored, lest the taxpayers lose-out to the cunning developer. Here's one local development in southeast Florida that recently sold for $190,000,000 where a "loan" of $23,000,000 to be repaid to the city (and its taxpayers) became a "grant" during some point in the signing of the contract, leaving the money not-repaid. Another $5,000,000 was involved for improvements at the site, also not to-be reimbursed. The contract called for the developer to pay 5% of the profits to the city upon a sale, and after the sale, he claimed there were no profits, so he owed nothing to the city. He supposedly has "walked-back" that claim, and I believe the amount to be delivered to the municipality is under negotiation. I suppose this is where the accountants and the accounting principles, and the law of contracts are exercised to their greatest-good. Whose "greatest good" remains to be determined, but at this time the developer is probably pretty-happy.

https://www.sun-sentinel.com/local/...le-hollywood-money-pay-up-20181016-story.html

 

[egdede]

^^^^What he said^^^^ And respect for the time and analysis.

 

[egdede]

Inspection fee is a minimum of $55. That is pretty standard around the country. That will MORE than pay for the hour it might take the inspector...

$55 dollars an hour would be a 110K a year. Since 1/3 of those $$'s would go to benefits it actually seems about right for an inspector's costs if you ignore everything else.

And then, remember, we have to have administrative support staff, a building w/phones computers and mechanical, a truck. I don't know, do you own or manage a big warehouse perhaps? It seems reasonable to assume $55/hr to keep a body in the field with support. I choose to be a well paid valuable employee because I know I couldn't juggle all the balls were I running any size business!

 

[BigWarehouse]

$55 dollars an hour would be a 110K a year. Since 1/3 of those $$'s would go to benefits it actually seems about right for an inspector's costs if you ignore everything else.

And then, remember, we have to have administrative support staff, a building, a truck. I'll assume you don't run your own business or you would have a better understanding of the costs it takes to keep a body in the field with support.

LOL! You have no idea what kind of business I run. Surely larger than yours. That $55 I was referring to is the cost for one single inspection, and does not include any of the other fees. Add several hundred more for the actual permit that cost the city nothing. And that's $55 for EACH TRIP, most things require more than one inspection. And if you fail it's $55 again for another inspection. Our local inspectors do not make $110,000 per year nor do they spend a full hour doing most inspections.

They MORE than make up for their actual costs or they simply would not do it. Any city is a business, and they are not non-profit. If they realized the permit/inspection division was losing money, fees would be modified in a big hurry.

And of course, any time anybody ever gets a permit, that means they are improving something. That means more taxes.

 

[Handyandy23]

Inspection fee is a minimum of $55. That is pretty standard around the country. That will MORE than pay for the hour it might take the inspector. Apparently some places have free inspections but that is extremely rare...


If they didn't, then they wouldn't give me permission to do it in the first place! Current property taxes are $178/year. When I'm done, probably closer to $10,000 per year total. They will make out like bandits!

You said it was 6 acres you're developing, how many homes is that? I just don't see how $10k/year in property taxes is considered to be a lot for that many new dwellings. In a 10 year period that's $100k, and in 20 years that's $200k. Is this a subdivision with new roadways / streets, or are all the houses fronting on existing roads?

In construction money doesn't go far, and you think over the next 20 years there will be required maintenance and repairs on sewers, water supply, the roads, sidewalks, etc. And that's not even considering things in the bigger picture like building parks, schools, rec centers, etc. As land gets developed and new subdivisions roll in, everyone expects new schools within walking distance, a playground close by, etc.

One can argue that the government doesn't always spend money as wisely as they should, but if it was this big money-making boondoggle then most governments wouldn't be running deficits and there wouldn't be constant budget fights over fixing roads and infrastructure.

 

[Charlie51]

Septic permit--$250, unless it is an aerobic ("engineered") system--$1250, plus "engineering" requirement (licensed engineer taking dimensions off of manufacturer's charts) --$4000. It does seem a bit excessive, doesn't it?

 

[BigWarehouse]

You said it was 6 acres you're developing, how many homes is that? I just don't see how $10k/year in property taxes is considered to be a lot for that many new dwellings.

8-12 homes. You don't know the area, taxes are cheap. The point is I am taking this lot, that I could just let sit and rot like it has for the last 1,000 years at less than $200/year in taxes, and bump it up to MANY MANY thousands per year. Average house around here pays $800-2000/year. Even if they made nothing in property taxes, they make plenty in other taxes from these people being in the city, they want more people living in the city, and it cost the city nothing for me to build this!

In construction money doesn't go far, and you think over the next 20 years there will be required maintenance and repairs on sewers, water supply, the roads, sidewalks, etc. And that's not even considering things in the bigger picture like building parks, schools, rec centers, etc.

I'm not sure how that is relevant to permit costs or even taxes. The city does not do maintenance for people! You are responsible for the sidewalk in front of your house. The only thing they do is keep the street up, after they receive it as a gift, and they won't touch it for at least 20 years. Then they will send some guy out at minimum wage with some cold patch for the pot holes. That's what standard road maintenance is like here. Surely no coincidence the number of cheap-o mexican tire shops in town is so high, the roads here kill tires. And of course, any sewer/water line on your property is always your problem also.

but if it was this big money-making boondoggle then most governments wouldn't be running deficits and there wouldn't be constant budget fights over fixing roads and infrastructure.

I don't see how you can draw the parallel. First, whatever money problems a city might have are nothing to do with new construction and permits. They do not ever lose money in these situations, people that think they do are delusional and have never actually done this kind of work. Whether permit fees in some places are a money grab or not is up for debate, I don't think they are here but certainly in some places it's impossible to overlook.

Just because they grabbed money doesn't mean they are going to go and fix anything with it, this is a standard government move. They always spend at least as much money as they have, often more, and no matter what, it will never be enough. Ever. Always. At the end of the year if they have extra money in some budget somewhere they frantically have to spend it so that they can ask for even more next year! This happens in every city, every state, and every country!

 

[ericlar80]

It should be low. You're not seeing how wrong that comparison is. Housing cost is not what is making local government 2X or 10X more expensive to operate. It plays a role, of course, but it's not proportional.

You need to get with the conversation. Nowhere was I advocating for what you are suggesting.

 

[egdede]

BigWarehouse, I edited my post above. How about this: $55/hr averages to 110k a year which seems like it would cover the costs of keeping an inspector in the field where you live as they don't make 110K. What really *****, no matter where you live, is when reasonable costs are increased with the extra inspections that could be avoided.

 

[maydaymike]

Building permits? Inspections? What are those?

Sent from my SAMSUNG-SM-G891A using Tapatalk

 

[ozyborn]

In my city the inspection process is just a cash grab. When my father was rebuilding his house it was a constant argument with the inspector over the codes. We had the cuurent code books the city uses and highlighted the sections for our work. The fool still wanted something diffent, complaining we were building things too sturdy. We ended up kicking them off the property and never dealt with them again. Never had an issue with insurance or selling the home years later.

This is not a “ never get a permit” speach. Use your own judgement. I am sure in some places the inspectors are very useful and help. Just not in mine.

 

[MushCreek]

Inspections were included in the cost of our permit. The rules are very light here. No drawings required, or engineering, as long as you follow prescriptive code. You submit very simple drawings after the fact so they know how much to tax you. The inspections were cursory, and few and far between. Example- I had an inspection for the basement slab. Because of the construction method (ICF) the basement walls weren't built yet. The very next inspection was rough framing, plumbing, and electrical. I built an entire house, including finished roof and windows. They were here three minutes (I timed them). They didn't even shut the truck off! Their only comment upon looking at the over-built house was, "You don't want this place falling down, do you."

The easy inspections were great, in a way. I'm glad I built my own house, though. I can't imagine what a lousy contractor could get away with.

 

[denis4x4]

Got caught building without a permit. It was a carport like cover over a 107 year old narrow gauge box car. Had to get a letter from an engineer that it was up to code. No real problems as it was to code. The engineer's letter was more than the permit! However, during this episode, it came out that 50% of the work load of building inspectors was looking at home improvements of properties in escrow that had work done without permits. In some cases, sales were stopped!

 

[gahrajmahal]

Here in the city of Cincinnati I was helping my in-laws do a kitchen remodel. All the neighbors that they socialize with hired out their remodeling jobs and not one of them remembers getting a permit. Since I had recently spent a year selling real estate, I told them of the major hassles when a property was inspected and the work was done without a permit. The potential buyer took that as permission to ask for a total redo or significant price reduction.

Well long story short, the city made the process so complicated and changed their requirements the three times we attempted to get permits, we just skipped it too. Poor planning and organization by the city means few contractors go to the trouble, and their clients don’t know to ask. I am not a contractor by the way, just a retired mechanical engineer and part time carpentry teacher.

 

[GRB]

California,
I paid $600 for permit for a cement walkway from the curb to my front door with a connector to the driveway on one side.
My neighbor across the street paid $29,000 for permit to add a small pool house that also had a bathroom.
Go 50 miles away to the beach and it gets expensive. My girlfriend paid $6400 permit to have the stairway up one flight alongside her garage replaced. Permit was more than half the total cost.

 

[binksman]

One of the benefits/burdens of living somewhere rural enough that permits are relatively cheap is that it is relatively easy to take part in local government. If you bother to take part, you will walk away with a better understanding of why permits exist and why they cost what they do where you live. The biggest reason for cost differences around here are infrastructure needs and controlling sprawl.

And keep in mind, land is more valuable when infrastructure is available, and developers are usually happy to pay those costs and then pass the responsibility for those onto the community (remember, government IS the community, at least those who take part in it).

We've got two good examples here in our tiny township, in our tiny county, in the flyover part of our state:

We have one trailer park in the township. The owner convinced his friend, a township supervisor, to accept responsibility for the roads in his trailer park. He figured this was fair because he paid for an on-site sewage treatment plant for the park because there were no local sewer services then. So our tiny township is responsible for 15 miles of roads + 3 miles of roads in the trailer park, most of which are turn around shared driveways and dead end streets. Since the roads were built privately, they were not built to the same standards are public roads and incur more repair and maintenance costs than any of the other roads in the township.

The second good example is that this past year the township did run public sewer along the main highway. The state said we had to because of septic drainage issues that area has because the land use and population density in that area changed over the last 40 years. Now that sewage line is there, the farm land is quadrupling in value. The three people who own most of that land have been the main proponents for public sewer simply because it makes their land more valuable to developers, at a cost primarily to the residents of the township (of about 70% of which do not live in the service area of the sewage line) and to the state (state grant helped with some of the construction).

 

[Engineer61]

Here in Colorado permit cost is fairly high as they collect the sales tax for the materials used as part of the permit cost. This insures that the town where a house is built or remodeled gets the sales tax money for the materials, instead of the town down the road with the lumber yard or cement plant etc. getting all the sales taxes in an area with several towns. Otherwise permit costs aren't too bad, except for water taps, which hav become very high over the years due to the cost to the provider of buying water rights.

 

[Richie Rich]

IIRC, the permits on my shop were ~$3,500 in total. The way our build worked out I managed to avoid some rather costly stuff like soils, fire and stormwater. Did have to pay for the stupid epoxy/rebar inspector tho.
Architect was $2,000 (he proved to be invaluable as he is a local guy who was very friendly with the city's building department, he settled a discussion on setbacks that would have shot the project down from day #1 had I tried to handle it myself).
Engineering was another $2,800.

So over $8k before a shovel went in the dirt. Compared to some of what my homebuilder clients deal with that is an utter bargain, some of them are 6 figures in before they can even start building.