TITLE
Recommendation to request City Manager to conduct a review of the city's hiring practices, and to issue a directive which prioritizes fully staffing the Permit Center as well other offices dealing with the review and approval of building permits;
Request City Manager to provide a report within 30 days regarding the status of the city's permitting software and provide options for optimizing and expediting the building permit review processes; and
Request City Manager to explore the creation of a "Development Shot Clock" for the review of local development in line with transparency, timelines, and standards consistent with state law.
DISCUSSION
The Problem
On May 11th, Director of Development Services Oscar Orci submitted a TFF to the City Manager, the Mayor, and members of the City Council detailing the challenges the Building and Safety Bureau faces in issuing construction permits. The memo highlighted lengthy permit turnaround times, lack of communication with applicants, and a slow development review process among other issues. During the COVID-19 pandemic the city's Permit Center saw its full-time staff drop from 11 to 6, with replacement hours coming in the form of private contractors and overtime work. This resulted in substantial delays in the review process which, although understandable, have had significant impacts on workers and prospective tenants.
A recent Long Beach Post article documenting these delays featured interviews with a number of local developers, one of whom even went so far as to say they had stopped doing business in Long Beach altogether after the pandemic.' As the city pursues a robust economic recovery, the ability to receive, approve, and execute building permits in a timely manner will have a significant impact on Long Beach's ability to thrive as we emerge from the COVID-19 pandemic. This is of particular concern given the national focus around building infrastructure, both public and private, to fuel this recovery.
Both the TFF and the LB Post article highlighted the that the root cause of the delays in permit approval have been staffing issues, whether stemming from furloughs caused by the pandemic or problems that preceded the pandemic. After starting 2020 with 11 fulltime staff and one contractor on the payroll, the Permit Center has been whittled down to just 6 full-time staff, relying on 3 contractors and 5 temporary staff for support." Since the start of 2021, the Center has suffered from a 50% vacancy rate. This illustrates significant delays in our hiring process. Without prioritization, these key positions may not be fully staffed until 2022, which could cripple our recovery plans and leave the city unprepared to take advantage of important future opportunities, including those offered to cities by the American Jobs Plan currently being negotiated by Congress.
The Opportunity
As we update our permitting system to better prepare for a post-pandemic future, the city has a key opportunity to make the investments necessary to build a modern, transparent, and efficient process from the ground up. Long Beach can continue to be a leader during the recovery by putting people back to work in good-paying jobs that provide pathways to the middle-class. Doing so requires more than just a band-aid.
Although staffing is the root of our current delays, expediting our hiring process alone won't be enough to spur our local economic recovery or help solve the housing crisis currently hurting Long Beach families. Roughly one out of every 200 Long Beach residents is experiencing hornelessness." 55% of Latino residents, 57% of Black residents, and 71 % of moderate-to-Iow-income residents pay more than 30% of their income towards housinq." We are not a city that can afford to merely return to its prepandemic pace of housing construction. In 2019, Long Beach was named the third worst city in the nation at lowering cost of living over the period from 2015-2018 in a study done by Smartasset, as rents as a percentage of median income rose from 37.4% to 41.5%. By contrast, Neighboring Los Angeles was the eighth best-performing city over this period, lowering its rent-to-income ratio from 55.7% to 51.7%.5
A common theme among the list of cities which had lowered their average rent burden was recent updates to their permit processing software, something Long Beach hasn't done since 2008.
• Oakland - a city which updates its permit tracking system quarterly, saw a reduction in its rent-to-income ratio from 51.5% to 44.5%.
• San Jose's 2020 update to its permit system helped it stay resilient during the pandemic, as it only experienced a 9% drop in permits issued compared to 2019, while neighboring San Francisco suffered a much steeper 34% drop." 7
• San Diego updated its permitting software in 2020, transitioning to a fully online system that provides customers full transparency regarding estimated approval timelines while also making the permit process more sustainable, removing the need for paper applications and reducing vehicle trips to permitting offices.
• Huntington Beach's building and planning departments transitioned to a new software in 2018 after 14 years without an update. Residents, contractors and interested persons can visit their website to read up-to-date information on permit activity, arrange inspections, make payments, and track the progress of their project from their home or smart phone 24 hours a day."
The referenced May 11 th TFF references that our Building and Safety Bureau is partnering with the Technology and innovation Department to upgrade the permit software utilized to process permit requests. It mentions that these upgrades will offer "an improved online application and payment process for Express Permits by summer." Given the critical relationship this system has to our economic recovery, it is important that the Council have an in-depth understanding of what is being considered to ensure that our systems be as efficient as possible, and that we offer the Bureau all the help we can to make sure that transition is completed as soon as is feasible.
Finally, it is critical that we review the development application process as a whole while considering improvements to staffing and software. In 2019 Governor Newsom signed SB 330 which mandates that residential, mixed-use, and supportive housing developments be either approved or rejected within 90 days of receipt of an application, with a special carveout for affordable housing which mandates a 60-day turnaround. Since SB 330's passage, cities like Long Beach have been exposed to significant legal liability stemming from delays in the permit approval process. According to a recent study by UC Berkley's Institute of Urban and Regional Development, the average turnaround on approval for discretionary development projects was a whopping 321 days." This cannot be allowed to continue if Long Beach is to reach compliance with state law.
In order hold itself accountable in delivering projects that addresses our local housing crisis and to protect itself from legal liability, the city of Long Beach should explore a policy around a timeframe or "Shot Clock" on the development of certain projects. This is not an unprecedented action. In fact, other provisions of SB 330 have already been codified into city code in Ordinance no. ORO-21-0007.1o Elsewhere, the city of Santa Monica's Planning Commission recommended their city council explore adopting the shot-clock provisions of SB 330 into its municipal code, which could include automatically approving these development projects if the permitting process pushes beyond the state-mandated tirneframe.!' The state of Texas also passed an ordinance in 2019 mandating automatic approval after a 30-day shot clock for most types of housing or land development." By comparison, SB 330's 90-day shot clock is far more manageable.
As a city recovering from a pandemic, facing a housing crisis, and continuing to tackle issues of economic equity, we should do all we can to remove barriers that prevent us from building a healthy, safe, and vibrant city for all our residents. As the nation prioritizes our economic recovery, let's prioritize investing in systems that help drive a speedy and comprehensive recovery that allows us to produce the housing and jobs our communities need.
Equity Statement:
The Framework for Reconciliation calls on the city to "identify mechanisms to increase development of affordable housing."
FISCAL IMPACT
As part of the recommendation, staff is requested to identify the costs associated with updating software and impacts of permit process changes on fee revenue.
SUGGESTED ACTION
Approve recommendation.
BODY
[Enter Body Here]
Respectfully Submitted,
APPROVED:
THOMAS B. MODICA
CITY MANAGER