Online permitting cuts down on long lines at the building department, so why aren’t more contractors taking advantage of it?
Two years ago, Los Angeles was huge by nearly every measure except one. Almost 4 million people lived within its borders, more than 1 million buildings rose out of the city's landscape, and thousands of contractors applied for 140,000 permits valued at $3.3 billion. Yet despite the city's population, despite its reputation for being progressive, despite the massive construction industry that continued to turn the soils of change across the sprawling metropolitan area, the L.A. Department of Building and Safety (LADBS) was woefully behind the technological times: Contractors still had to spend hours driving to LADBS offices to obtain permits for even the smallest projects.
In the L.A. of two years ago, it would have been a gross understatement for O'Bryant Electric to call the permit process a hassle. The Northridge, Calif.-based commercial electrical contractor did — and still does — between $25 million and $30 million in new construction, meaning it had to pull several hundred permits per year. And although its offices are located only 25 miles away from the LADBS, the notoriously congested L.A. freeways and long lines at the city offices made it impossible for employees to make the trip in less than 3 hours. By Danielle Buchholz's estimate, that amounted to at least a thousand man-hours spent sitting in the car and standing around. “There were lots of times when it seemed to take forever,” the contractor's project administrator says. “Fighting traffic, trying to park, waiting in line…it took a long time.”
Creating a more user-friendly application method was the challenge newly elected Mayor Jim Hahn faced in mid-2001, and after a year of steadily streamlining the process he made permits available online in March 2002. Using only a PC and a credit card, contractors could apply for and receive permits in minutes without ever leaving their offices.
It didn't take long for the system to gain traction. Southern California contractors applied for 20,000 permits online in the remaining nine months of 2002 and more than 30,000 in 2003. The city now issues more than 120 permits online per day. “It has been a tremendous success,” says Andrew Adelman, general manager of the LADBS. “If we issue 35,000 permits over the Internet annually, that means 70,000 less trips over the freeway and 35,000 less people have to find parking to come into our offices. You do the math.”
The system may have improved the city's traffic and parking situation — albeit only slightly — but more importantly, it made life a lot easier for contractors like O'Bryant Electric. The process that used to monopolize employees' time for hours now took only minutes. “It's extremely quick,” Buchholz says. “If somebody gives us a job today and needs an inspection on it tomorrow, it can be done because we can pull the permit in five minutes.”
Point, click, permit. Before you jump online to pull a permit for an electrical and control system at that new power plant you're working on, take note: In most cases, permits for projects that require plan submittal aren't available online. However, the majority — everything from temporary power poles to low-voltage wiring and the replacement of branch circuits — are eligible.
The range of available online permitting features will vary from one city's system to the next, but the core steps are usually the same. After filling out the necessary paperwork to establish an account — the only part of the process that typically requires a trip to the building department office — by providing name, contractor license number, and contact information, a contractor will receive a user name and password that they'll use from that point forward to access the permit portion of the city's Web site.
The online application itself resembles a paper application and asks for the standard information: type of project, location, and scope. Some systems will allow you to choose items from a drop-down menu, and others will require you to check boxes, but the end result is the same: Once the application is complete, you'll be able to purchase the permit electronically and print it out immediately.
With the exception of the inevitable getting-started mistakes, the process is simple, and that's how Maury Blackman thinks it should be. He's the vice president of marketing and business development for Accela, a Dublin, Calif.-based company that develops online permitting software. He sums up the optimal online permitting process in three words: apply, pay, print. For several years before the Internet revolution, many cities offered a fax-in application method, but it still didn't provide the quick turnaround time that the online method does. “Agencies will tell you that they turn faxed applications around as quick as they get them, but it's normally two or three days before you get it back,” he says. “But if an electrical contractor can go online, apply, pay, and print right then and there, it's so much more effective and efficient for everyone involved.”
The biggest difference between one city's online permitting system and another's will most likely be the method of payment. Like LADBS, many cities accept credit or debit cards, but others require contractors who participate in the program to open and maintain an escrow account that the city can draw against as each permit is pulled.
Because it requires contractors to maintain a separate account and tie up money they could use for more immediate purposes, the escrow account payment method isn't popular, but for some cities it's the only choice. For the City of St. Louis, which began offering online permitting at about the same time L.A.'s system was up and running, the escrow payment method is a relic of the fax-in application system the city put in place about eight years ago. “We just weren't set up to do the payment electronically,” says Bob Lee, St. Louis public works permit supervisor. “But we're meeting with our IT people to set up a system whereby they can pay with a debit or credit car electronically, hopefully within the next year.”
The times they are a changin'. If your local municipality doesn't offer online permitting now, Blackman is willing to bet that it will soon. Of the 500 U.S. cities and counties the company works with, he says each one is in the process of making it available or has plans to in the immediate future. Thirty-three offer it now. It should be noted, though, that because some cities may work with other vendors or develop the software internally, the total number of municipalities with online permitting may be much higher. L.A., for example, is not an Accela customer. “Within the next two or three years, there's no doubt you'll be able to go anywhere and pull a permit online,” Blackman says.
The factor that may ultimately determine the success of online permitting, however, is how willing both parties are to try something new. LADBS' Adelman is proud of L.A.'s progress in making the technology available, but the 35,000 permits issued annually over the Internet only constitute about one-third of those eligible for online application. In fact, he predicts that the number of permits applied for in L.A. over the Internet each year will top out at 45,000. “A segment of our population isn't up to speed on the technology,” he says. “Contractors — especially those in their 40s and 50s — aren't at the cutting edge of technology. There's a certain level of comfort in doing it the way they've always done it.”
The online method has been considerably less popular in St. Louis, possibly because pulling a permit in person didn't take as long as it did in L.A., which kept demand down. Lee doesn't know exactly how many permits St. Louis has issued online because his system doesn't differentiate them from those applied for the old fashioned way, but of the more than 500 electrical contractors he estimates work in the city, only about 50 have registered for the service. And it may be some time before it catches on. “A lot of the contractors who are in the construction trades are guys who grew up using a slide rule to do calculus, so they're kind of reluctant to get into [online permitting],” he says. “But this is one small thing that they could take advantage of to make better use of their time.”
Blackman has noticed that generational divide between the tech-savvy and tech-averse as well, but he says older contractors can't afford to not adjust with the times. “Most contractors are small business owners, and this is a way to make them more efficient, help them get ahead, and enable them to be more successful,” he says. “They have to have the courage to make more money for themselves.”
And those who use the system tend to find it's not that scary after all. O'Bryant's Buchholz had limited computer experience before working with L.A.'s online system, learning only what she needed to do her job. With little guidance she got the hang of it. “I'm going to be 40, and I didn't work with computers at all in school,” she says. “But this was extremely easy.”
The cities themselves are also responsible for making sure the option succeeds and progresses, so Blackman says they can't be as reluctant to change as some of those contractors have been. For example, permits aren't available for projects that require plan submittal, but the technology for submitting plans over the Internet exists. Contractors have been using online plan rooms to acquire plans during the bidding process for several years, yet most cities have yet to incorporate the technology into their permitting systems at this relatively early stage in the game.
For L.A., where a little more than one-fourth of permits are ineligible for online application, Adelman says it was a matter of infrastructure. File sizes for digital plans are huge and require fast Internet connections to be processed effectively — something that cities even the size of L.A. can't handle. “Although there has been advancement in the technology, it hasn't been to the extent that we are fully comfortable doing it that way,” Adelman says. “But as we get faster modems and faster transmission over the Internet, we hope to be able to do it that way.”
Regardless of how the technology advances in the future, the current form of online permitting has helped lower Buchholz's stress level…halfway. Projects in L.A. constitute only 50% of O'Bryant Electric's work, and it's the only city in the area that offers the service. But it's still a business and it's still trying to turn a profit, so she has grudgingly resigned to put up with the headaches. “You can't let something like that affect you,” she says.
Many cities are in various stages of developing online permitting systems, so the best option for looking into its availability in your area may be as simple as going online and checking. Most cities and counties have a Web site, and a quick search will show what's available. And if it's not an option yet, Blackman says contractors have to be proactive about letting their building department know they want it. “If the local agencies aren't offering permitting online, they should encourage those governments to do so,” he says. “The fact that this is a way to save money and gain more time to do the things they want should be a pretty strong motivational factor.”
Two years ago, electrical contractors in L.A. had to call and speak to a live operator to schedule an inspection, sometimes spending as much as an hour on hold. The city recognized the problem and added two more options as it was rolling out the online permitting system: contractors could call into an automated system or make the request online. “Compared to when I first started in the trade, this is a thousand times better,” says Dave MacLean, chief electrical inspector for the City of L.A.
Offering inspection requests online has not only made it easier for the contractor, it has made the inspector's job easier…which ultimately benefits the contractor. MacLean can view his daily list of requests for inspection and shift his team of inspectors around based on the concentration of calls in each area of the city, making it possible to get any inspection done within 24 hours of a request.