In the running debate over Georgia’s inflated housing prices, there are the usual suspects: high interest rates, the cost of building materials, Wall Street investors. But while Georgians seek to assign blame for why “starter homes” are increasingly unattainable, a lesser known culprit remains the cost of time.
Across the state, research shows that the cost of regulatory delay is no longer just a bureaucratic headache for builders; it has a direct impact on the bank accounts of families trying to purchase a home. Unfortunately, the sheer length of time it takes to gain approval has become a significant tax on new homeowners.
For a typical single-family home in Georgia, the average cost of permitting delays is less than one percent of the final purchase price. But on a $350,000 home, even that 0.8% equates to a “waiting fee” of $2,800. This is money unavailable to be spent on brick facades, sturdier foundations, or even energy-efficient windows – it is wasted capital.
To understand why time is so expensive, consider how a house actually gets built. Most developers rely on construction loans to fund their projects, which accrue interest the moment the first dollar is drawn.
For context, Georgia law currently requires local governments to approve a building permit within 45 days. But when a local government sends required changes back to the builder or developer, this “shot clock” resets – even, or especially, if not all departments involved in reviewing the plan have seen it yet. As a homebuilder once told me, “I build in five metro Atlanta counties. In one county, I can break ground within two days of submitting my permit. In another, it takes seven months.”
Advocates for reforming this process aren’t seeking to decrease the timeframe, just to enforce it.
Cities and counties note these delays are often due to incomplete permit applications. Builders and developers counter that some of these resubmissions occur unnecessarily, like when one city or county department demands changes to the building plan that are in conflict with another department’s directive.
Regardless, the interest keeps building on the construction loan – not to mention any fees paid to the engineers and architects to make the requisite alterations. All of these costs are ultimately passed on to the homebuyer.
The solution isn’t to eliminate oversight, but to make it more efficient. And yet, what may seem like a straightforward call for good government can often get lost in the dynamics that accompany the politics of housing.
That is why it is important to note that reforming this process is separate from zoning decisions, like approving a new subdivision. These permitting delays are costs accumulated after the community has weighed in, policymakers have made their decision, and the builders are simply waiting for the local government’s green light to break ground.
Critics also argue that any attempt to accelerate this process is an attempt to bypass environmental protections or erode safety standards. This is a misnomer; streamlining this process is not a way to cut corners.
Clarity and consistency are the goals, not the erosion of consumer protections. A home would still need to meet the International Building Code, it would still need to be structurally sound and fire-resistant and it would still need to meet all of the existing environmental standards. This would also ensure that a builder knows exactly what the requirements are and that the government provides an acceptance (or denial) in weeks instead of months.
Fortunately, addressing this situation has received bicameral support so far in the General Assembly.
HB 812, sponsored by Representative Mike Cheokas, and SB 447, sponsored by Senator Clint Dixon, both seek to tighten the 45-day approval process, provide clarity on the requirements for a complete application on the front end and reasons for denial on the back end. Local governments which process more than 250 permits in a year are also required to provide real time status updates on a public website.
Both bills have passed out of committee in their respective chambers and are awaiting a floor vote.
While the state and local governments cannot control the Federal Reserve’s interest rates or the impact of tariffs on building materials, they can help prevent costs from unnecessary delays.