An interactive timeline
The construction of a new housing project begins with the developer conducting site feasibility assessment. This phase is the initial due diligence stage where builders assess all factors governing the suitability of site. Some features that would go in a feasibility assessment are macroeconomic factors such as demographics and federal interest rates, as well as local factors like municipal requirements, competitor data, and site assessments such as soil quality and construction costs (1).
These assessments are costly as they require specific interventions for specific sites. As one developer from the Northeast told us:
Feasibility Assessments are unique to each site largely because site specific tests such as soil testing cannot be scaled.
Private builders highlighted the need to scope out regulatory compliance at this stage. Most builders we spoke to said they start speaking to city government officials very early during project conception to accurately estimate project timeline and overheads.
After conducting site assessments, if the project is deemed feasible, the developer starts paying an options payment to the landowner so that the land is kept off market.
Projects that are designated as "affordable" have a wide selection of public financing options to leverage. However, there is often more demand than supply for these financing. As a result, public financing is very competitive and requires a long timeline of planning.
As another developer from New York told us, these applications require significant investment of resources from the real estate companies.
Getting public funding, especially LITEC funding, requires Developer to optimise their entire operating process for application seasons.
More importantly, if a developer doesn't get a fund in their first round of applications, it may be several months before they can apply again (2). As a result, public financing is largely limited to specialised firms operating in this niche. Most other builders need to source funding from private sources.
At this stage, the developer must obtain formal approval from the city government. A typical range of permits a developer needs to get can be:
Land Use and Zoning Permits: These permits attest that the developer can begin in the site and require detailed documentation on the project.
In certain cases, builders may need to submit rezoning applications or variance requests for exceptions to zoning requirements. However, these zoning applications are unique to each developer. As a public housing official from the West Coast told us:
Rezoning applications are approved as a variance rather than a formal change to the zoning law. Its difficult to communicate across departments about projects that have gotten variances previously. As a result, each developer must go through the same lengthy and time-consuming process, even for similar projects as similar sites.
Environmental Permits: Depending on the state and local regulations, environmental permits attest that a development meets certain environmental standards. Documentation for these permits can include results of environmental tests such as soil testing, air quality testing, and water quality testing
Site Plan and Design Permits: These permits relate to the site and design characteristics of the development. Developers may need to get utility connection permits for water, sewer, and electricity; or get approvals on their architectural plans and elevations. Buildings also need to be checked for fire code compliance and other physical regulatory standards.
Sometimes these regulations may not be easily accessible or standardized, resulting in compliance difficulties. According to one private developer
Two fire marshals in the same county can have two differing interpretations of the same building codes
Owing to this lack of consistency, even experienced developers need to submit multiple iterations of their building design before getting approval.
Compounding these issues is the aging public IT infrawstrucuture. According to an East Coast developer
Some code enforcers might be tracking changes to your designs via email—a process that doesn't work for iterative communications where file chains might get lost and emails missed.
Depending on the jurisdiction, builders may be subject to Public Design Reviews where community residents come to give feedback on site plans. Most entitlements phase require builders to hold community engagement sessions to get their feedback. These meetings are especially important, as resistance from residents can make city government hesitant in approving some permits. However, multiple stakeholders in both public and private sectors highlighted the communication gap in these public engagement sessions that often leads to inefficiencies, delays, and missed opportunities for creating more housing. A common sentiment we heard expressed was
Public stakeholders at these meetings are hesitant of change and need to be assured that the project doesn't impact their lives too much.
Construction Management Plan: These permits ensure that the builders is taking steps to mitigate the negative externalities of construction like noise, dust, traffic, and waste.
Unsurprisingly, the entitlements phase are one of the longest stages of a project and can take anywhere from one to two years. This timeline is especially significant for the builders who need to pay options payments for landowners while obtaining the needed permits.
Once the construction goes underway, the city government conducts regular site inspections to verify that work matches approved plans. These inspections also comprise of specialised checks on structural integrity and fire safety.
However, public staffing shortages often makes scheduling inspections difficult. This limits the window where inspectors can visit sites, significantly lengthening the project timeline.