While many other cities are increasing the regulatory burden on starting or expanding businesses, policymakers in Phoenix, Arizona have recently taken significant steps toward reducing it. In our latest interview in the Innovators in Action 2012 series, I sat down with Phoenix City Councilman Sal DiCiccio to talk about the city's new plan review and permitting reforms, how they came about and what they mean for economic development.
Regulatory delays and uncertainty in local government—particularly in permitting related to commercial and residential construction—tend to drive up the costs of development and can become so burdensome that they ultimately serve as a disincentive for economic investment. This used to be the case in Phoenix, until its City Council recently enacted reforms that shifted a significant portion of city permitting and inspection functions to the private sector and created 24-hour turnarounds for projects that used to take four to six months.
Phoenix is implementing a "self certification" model where architects and engineers who undertake city training and random audits can submit plans for a variety of residential and commercial construction projects (exceptions include high-rises, steep slope development and hazardous land uses) and be able to walk out with a permit, on the same visit. Next year, the city plans to go one step further by implementing online permitting, which will be even faster and more convenient for permit seekers.
In all, these reforms are intended to improve Phoenix’s economic competitiveness and lower costs for taxpayers. Here's a brief excerpt from the interview:
Gilroy: What did Phoenix pass to help businesses get up and running faster?
DiCiccio: We created a model making Phoenix a 24-hour city when it comes to plan reviews and inspections. Walk in with your building plans, walk out with a permit and start construction that same day. Call for an inspector before 10 pm and get an inspection the very next day. That’s huge, compared to our history and what happens in most metro areas.
Phoenix shifted a significant portion of the planning and inspection functions to the private sector. Phoenix has instituted what’s known as a “self certification” model, which means architects and engineers who have been through city training will submit plans and be able to walk out with a permit, on the same visit. That includes all new construction up to 75 feet, all tenant improvements; civil permits for industrial, commercial/office, multifamily and residential; and historic preservation. More than 100 professionals are now certified on the list.
Next year, permits will be online, so they will be able to push a button and submit plans electronically. Today’s 24-hour process will get even faster.
Gilroy: How will Phoenix’s permitting reforms help business owners?
DiCiccio: Getting permits quickly to do construction and improvements saves time and money. We also have greater predictability, so they will know when to lease, when they can build and when they should hire employees, for example. Unpredictability not only costs them time, money and market share, it also discourages some would-be entrepreneurs from even starting. When you’re a small business trying to build your dream on savings and credit cards, months-long hold-ups can be devastating. We’ve ended that.
It also gives them a choice of whom they want to work with. Private sector architects and engineers may provide more targeted services to a particular industry or business owner, and I believe people must have that choice. Competition creates more and better innovation. Government can't specialize in every field, but the private sector can and does.
[Note to readers: In previous years, we have published Innovators in Action in an annual report format, the last edition having been released in early 2010. The publication has been on a temporary hiatus since then, but we have resumed publication in a slightly different format. In order to deliver timely content to our readers on a more frequent schedule, we're publishing one Innovators article per month on reason.org. Other articles featured in the Innovators in Action 2012 series are available here.]