Doing Business with City of Austin Remains Difficult
Ask any builder, remodeling contractor, plumber, electrician, etc. what it’s like to obtain permits and do a project in the city of Austin, and you’ll marvel at the uniformity of response. You’ll hear simply, “it stinks”.
Some won’t work in Austin at all anymore. I spoke with a small builder a couple of years ago about this. He had become so enraged at the bureaucracy and hassles that he had sworn off Austin, pledging to never build anything in the city limits again. At that time he was working on a custom home in Williamson County, where he said it was like night and day and he was treated like a valued customer, not a nuisance.
One of my former investment clients built a duplex neighborhood in Austin in the early 2000s. That was his last. He moved the business up near Ft. Worth and builds apartments and duplex communities in that area. He told me it just didn’t make sense to remain in Austin. Where he is now, from the time they identify land for a project and make the purchase, they can have all permitting in place and start work in less than 90 days. In Austin it took him more than 2 years just to get started on the last project he did, a community of about 50 duplexes. And they kept changing the rules on him along the way. He said that doesn’t cut it, and left Austin.
And so when I read in the Austn Business Journal a similar tale of “never again”, it came as no surprise.
By the time Centro Partners completed the first phase of The Domain with an Austin Energy three-star energy rating, the developers had their fill of being green the Austin utility way.
When it came time to do the second phase, “we didn’t even bother,” said Kent Collins, company partner. “I didn’t want to slow down our permitting process.”
Austin remains a difficult city in which to do business. Not just for developers, but even small investors.
In 1995 Sylvia and I remodeled a home off of S. Congress. We redid the entire home, gutting it entirely. The utility people came out and told us where we had to place the riser for the new electrical panel. When the final electrical inspector came near the end, he told us the riser was in the wrong place and had to be moved 3ft. I told him it was exactly where the city had told us to put it and even pointed out the marked spot on the fascia where the city had marked the spot. “That’s a different department”, he said. “They told you wrong. It has to be moved”. And this news was delivered without apology or any acknowledgement of the wrongness of it.
Then he wrote me up for not having a permit for a deck. It was a large 20ft x 30ft deck about a foot off the ground. But a small 5ft portion of it along the side was more than 30 inches off the ground as the yard sloped away at that point. That triggered, according to code rules, the requirement to place handrails around the entire deck, even though 98% of it was one step off the ground. I had to go down to the city with “plans” for the deck, obtain a permit and have it inspected. If failed inspection for not having a round little hand hold at the one step from the yard up to the deck. So I had to fix that and have it reinspected. Between the deck and moving the riser, the city cost me an additional $1,000 on the project.
People complain about sprawl in Austin, the traffic, the traffic the drives in from Leander, Dripping Springs, etc, overburdening our roads. Yet we have provided disincentives for builders to do business with the city. One outcome of that is the proliferation of all these psuedo condo/home neighborhoods we’re starting to see.
Essentially they are detached houses that are really condos. Why? The developer can avoid massive hassles and perhaps years of development and permitting process by eliminating city streets from the project. Instead of subdividing into regular neighborhood lots, and having regular city streets, they develop it as one commercial piece of land with private roads. The roads, technically, are parking lots shapes like streets. This circumvents hassling with the city and saves an enormous amount of time and money. The Independence neighborhood on Manchaca Rd. just south of stassney is an example of this new hybrid workaround.
The Austin Business Journal article goes on to say:
In hindsight, Collins said he regrets not implementing the city’s energy-efficient standards. But after dealing with the bureaucracy involved with Austin Energy’s rating process the first time, he was “totally turned off to the program.”
Developers, city officials and commission appointees have all said the current system is confusing and a sticking point that delays projects. In response, Austin Energy is floating a proposal around City Hall to standardize the green building rating system across different development types and provide more leverage to ensure developers comply.
The first phase of the Domain is three-star energy rated. The second phase isn’t. The developer was ready, willing and capable of building in exactly the manner the city of Austin wants builders to adopt, but the City of Austin itself proves to be an incompetent partner in the process, and so developers are saying, “no thanks”. You can’t invite people to the dance, then put them in a straight jacket, make them sit on the sidelines waiting, and then crush their toes. And it’s not just the energy star program that needs changing, it’s the entire way the City of Austin does business and treats builders and developers.
So, the city recognizes, as they have known for many years, that they are hard to work with and are talking about trying to fix it. If we want people to build green, we have to remove the disincentives caused by the process difficulties. If we want more infill projects, higher density, walkable neighborhoods, revitalized areas, we have to make Austin an efficient and inviting place to do business.