Despite some recent tension from the North Texas builder community toward the cumbersome fees, restrictions, and permitting delays imposed by city governments, all parties gathered Thursday for a friendly discussion.
The Dallas Builders Association’s State of the Industry event featured two all-star panels before a sold-out crowd at Venue Forty50 in Addison.
Phil Crone, executive officer of the Dallas BA, said the relationships with municipal leaders have helped local builders navigate challenging issues in a post-pandemic market.
“The partnerships that we have are critical to working through some of the changes and processes to allow the North Texas area to be the largest housing market in the country,” Crone said. “This is the place everybody in the United States is looking forward to moving to.”
Municipal Panel
The Municipal Panel featured Celina Director of Development Dustin McAfee, Dallas Assistant Director of Land Development Sam Eskander, Denton Director of Development Services Scott McDonald, and Irving Inspections Division Director Wayne Snell.
Celina got faster and better during COVID, McAfee said, overtaking McKinney and Frisco as the No. 1 city in the region for new housing permits.
The microphone was passed to Dallas’ official’ Eskander as the cohort mused about how painful it would be to have to process permits on paper.
“Painful,” Eskander said to an amused crowd. “That’s what we went through. Prior to COVID, everything was submitted as a hard copy. It was very busy. We had developers, contractors, and applicants lining up outside the door at 4 o’clock in the morning. It started to look like Best Buy on Black Friday.”
And then it didn’t.
As the city was forced to transition to ProjectDox before the kinks were worked out, the permit backlog increased and builders had to wait several months for applications to be processed. Meanwhile, the department was losing valuable staff members.
“After COVID, we made a lot of improvements,” Eskander said. “You can get a permit on the same day now.”
While Dallas had the farthest to go in transitioning to digital operations and clearing a years-long permitting backlog, the city has made tremendous progress over the past year, Crone said.
Adam Auensen of Tonti Properties said the permit turnaround time in Dallas isn’t bad compared to other U.S. cities.
“I think I have a little bit of an unpopular opinion; I’ll defend Dallas and their permit turnaround timeline,” he said. “We’re building on the East Coast and we just got a standalone swimming pool permit nine months after applying for it outside of Raleigh, N.C. We’ve seen year-long delays over there. We’d be elated to get a permit in three months.”
Andrew Pieper of Hillwood Communities also showed Dallas Development Services some grace.
“I don’t want to give anyone a pass but I can sympathize with the city,” he said. “Everyone in our business, the past few years, has been completely swamped. It’s challenged everyone and the city’s not exempt in how much we’ve gone through and how much we’ve had to change in a short period of time. If municipalities are experiencing challenges, we just want to see that they’re working on solutions proactively.”
Impact Fees in Denton
McDonald talked about a potential increase in developer impact fees that the Denton City Council is considering.
Crone said Dallas BA’s Director of Government Affairs David Lehde has been working closely with Denton developers and city leaders on the matter.
“These fees can have obvious ramifications in terms of housing affordability,” Crone said, noting that a council vote is scheduled in April.
McDonald explained that Denton already has impact fees of about 20 percent of the maximum rate, or $2,000 per unit. Committee members and elected officials have kicked around increasing that rate to 75 percent or 100 percent, which could amount to impact fees of $20,000 per lot, McDonald said.
“It’s valuable for us to get feedback from the development community,” McDonald said. “It’s valuable for elected officials to understand. They’ve got a $1.6 billion budget. A big piece of that is the infrastructure. You’ve got to maintain the infrastructure and [accommodate] increased growth. The increased growth means you have to build bigger roads and add roads. The policymakers view that as development should pay for itself. We’re attempting to educate policymakers that development does pay for itself.”
If developers are overtaxed, they’ll leapfrog into other communities and Denton won’t get the revenue, but it will get increased traffic, McDonald explained.
Based on the feedback they’ve received from the development community, Denton staff is proposing a rate increase of 10 percent above what is currently assessed or 30 percent of the maximum rate.
“This is seemingly trending from a smash-and-grab proposal to something that is probably, hopefully going to be a little more sensible,” Crone said. “You see an example of a partnership there. You can’t have affordable housing when you make building and developing more expensive and increase fees by up to $20,000.”
