Richmond’s Growth Bottleneck: Building Permits

Proposed 7west project.

Jeremy Connell wants to build a dozen high-end townhomes in Manchester, right across the James River from downtown. The $6 million, 7west project envisions four-bedroom, three-story townhouses priced in the $700,000s, providing a nice boost to the City of Richmond’s tax base and offering a short, easy commute to the region’s central business district.

He originally hoped to begin construction in April of 2016. Four months later, when demolition began, he revised the timetable to September. Yet today, 16 months later, work has not proceeded beyond the foundation-laying stage, reports Richmond BizSense.

The City of Richmond is experiencing an unprecedented boom as a wave of Millennials, empty nesters, and corporations move into downtown and surrounding neighborhoods. There is enormous pent-up demand to live and work in the amenity-rich city, with its walkable streets, historic buildings, museums and cultural institutions, and its canals and James River parks. But there’s a hitch. The city’s building inspectors can’t keep up. Writes BizSense:

“It is by far the worst it has ever been to get a project developed in the city of Richmond,” said Connell, who has been developing in the city for 15 years.

“The process is undermanaged, understaffed and overwhelmed,” Connell said. “It’s a bad three-way combination that retards development in the city.”

According to BizSense, Connell’s experience is frustratingly common. Doug Murrow, in charge of permits and inspections, attributes the delays to departures and vacancies that left the department temporarily short-staffed. Other observers quoted by BizSense (in a very well-sourced article, by the way) say the problems run deeper. The city has been slow to embrace new digital-permitting technology that would speed the process.

“The culture in Room 110 has been: this is the way we’ve always done it, this is the way we’re always going to do it,” says Charlie Diradour, a local landlord and developer. Diradour says that he hopes that the new mayor, Levar Stoney, will break the logjam.

For his part, Stoney says he is looking to neighboring Henrico County to see how the city might perform better. “We are suffering from staffing issues,” he told BizSense. “I wish we had the numbers that our friends in Henrico have: at least 70-plus people working on commercial and residential permitting. But we don’t have those numbers here. I know that the departments are doing everything they can to keep up with the uptick, but we can always do better.”

Bacon’s bottom line: In theory, core urban jurisdictions like Richmond should be kicking suburban butt in the race for development dollars. While Richmond clearly is rebounding, urban renovation is not occurring as rapidly as it could. In the past I have focused mainly on the zoning code as a throttling force. When Richmond could still annex country land a half century ago, it adopted a suburban zoning code that restricted denser, mixed-use development — precisely the kind of development the market wants to see. City Council has finally addressed that problem, especially in the Broad Street corridor (see “Richmond’s New Growth Corridor.”) But the city hasn’t fixed its permitting bottleneck.

In the competition for development, the City of Richmond enjoys immense advantages over its suburban neighbors, Henrico and Chesterfield Counties. But the counties do have one competitive edge — efficient government administration. The hassle factor is much lower. As Diradour told BizSense, contractors have told him that they add a point or two to their overhead when they do business in Richmond to account for the inevitable delays.

I don’t know if other cities have similar problems. BizSense suggests that the City of Roanoke has moved to a more efficient digital permitting process. Regardless, Richmond better get its act together, or it could squander a historic opportunity to rejuvenate itself.

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4 responses to “Richmond’s Growth Bottleneck: Building Permits

  1. If this is what professional developers experience — people who know the rules, the forms, whom to talk to — can you imagine what an innovative homeowner who wants to put a solar collector on his roof and associated electical equipment in his basement has to go through? What even a solar equipment manufacturers offering a turnkey package to a small business has to go through? And, you wonder why urban homeowner/ business solar installations haven’t “taken off”? Don’t blame Dominion; the problem is right here: obsolete building codes and risk-averse, understaffed building inspection departments whose reaction to anything out of the ordinary is to delay, delay, until it goes away.

  2. I’d offer a different thought than “the govt can’t help from screwing up” meme.

    Here’s how it works.. during non-boom times.. cities/counties can get highly qualified people for a very reasonable salary – the pay is not that good compared to the private sector but the job is more or less safe and has “benefits” … the salary scale is slow but steady.

    then the economy picks up and you need people who know what they are doing especially with commercial-scale development but their salary requirements are more than the guy who has been there for years doing his job.

    so how to you pay a high enough salary to attract the level of skill needed if that salary is more than the guy who has been there for years?

    Our county has that problem not only with building inspectors but with IT (information technology) people.. They cannot offer a market-competitive salary without that salary being higher than the folks who have been doing that job for years .. for less salary.

    So… if you were in charge.. how would you fix that?

    our county just paid a consultant many thousands of dollars to “analyze” then come back and “report” the longevity versus market wages conundrum.

  3. When faced with the need to address incredibly complex land use applications from Tysons and elsewhere, Fairfax County raised fees (still often well below cost) for processing them and hired more staff. Complicated cases will take longer.

    Smaller applications often can get hung up when the applicant has not worked with neighbors and/or adequately addressed material issues. And vice versa. Projects that skirt applicable rules and regulations in order to maximize yield often bog down. Projects that address material issues seem to go through fairly smoothly.

    It’s my impression that fewer and fewer applicants propose to develop by right (i.e., to what is permitted under the Comp Plan and zoning ordinance).

    My question for Richmond applicants is: Do your projects seeking density address the additional burdens on traffic, storm water, schools, parks, public safety and so on, that are imposed by the high level of development?

    • I’m actually with TMT on this… good developers have their ducks in a row and ones pushing the envelope… often cause their own delays.. sometimes and then they go “public” trying to make the city staff look bad and pressure them to approve.

      The proof is .. are there developments going forward.. or are ALL actually slowed or stopped? My impression is that Richmond has quite a few projects that HAVE gone forward.

      The city has a responsibility to the existing residents and taxpayers to not subsidize new development – not on the infrastructure, services – nor quality-of-life for existing folks.

      If it can be said for a particular proposal that it actually ADDS value to the area where it is proposed.. and to tax revenues..and does adequately address impacts… then it’s a good proposal that deserves fast-tracking.

      Proposals that don’t do that.. often bump along from one problem to another… proposals that are on the cheap – ought to be delayed and/or denied.. they are _not_ .. “entitled” to develop anything beyond by-right.

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