The San Diego City Council voted last week to enact an ordinance providing for Permit Application Extensions, a much-appreciated development for home and apartment builders. It is crucial to know a project won’t die simply because the application time frame has lapsed.
The economics of building can change rapidly, and we are seeing that phenomenon right now. The capital market is not providing the financing needed for residential housing at a rate that keeps a project in balance, meaning if you can’t get the funds at the right time and at the right rate, the project doesn’t pencil. When a project doesn’t pencil, it doesn’t get built. The economics are really quite simple.
The Council recognized some things are out of a developer’s control, and because of that it is critical to provide more time. It is such a waste to spend time and money, upwards of hundreds of thousands of dollars in some cases, only to see the project collapse because an extra day came and went. It’s especially frustrating to see this occur during a housing crisis.
San Diego now will allow a permit application extension under these circumstances:
- The Building Official may extend a Building Permit application for one additional period not exceeding 180 calendar days if the Building Official determines that the building standards effective at the time that the Building Permit application was submitted are sufficient to protect public health and safety or the project complies with significant life and safety building standards effective at the time that the Building Permit application was submitted and:
- The additional application extension is in the public interest; or
- Circumstances beyond the control of the applicant prevented the issuance of the Building Permit
A bulletin will be created for implementation. The BIA will participate in the writing of the bulletin, to ensure the direction is clear.
Next, we are turning our attention to negotiating a Permit Extension, separate from an Application Extension, to give builders more time to complete a project if it’s needed. If the financial markets are in disarray, it’s not right to dismiss a good residential project that simply needs a little more time to get across the finish line.
