Builders are often waiting months for permits as the city of Missoula's Development Services office struggles to keep up with the momentum of new construction in the area.
The glut of projects has Development Services asking for more staff and the building industry calling for faster reviews to save time and money. The current slowdown also means the community is making less headway on upping the affordable housing stock in Missoula.
Last week, Alicia Vanderheiden, the office’s business manager, painted a picture of an overworked staff as she presented a budget request to the Missoula City Council.
“Workload has been outstripping capacity,” she said, while requesting the council approve two new full-time positions.
City engineer Kevin Slovarp agreed.
“There’s increasing pressure on private development to get things done, and we’re just not able to handle it,” he said.
Councilor Michelle Cares shared an anecdote that reflects developers’ frustration with the time it takes to get projects permitted because the office is so backed up with work.
“A developer asked me once, 'How long are permits supposed to take?'” she said. “I asked Mike Haynes, the former development director, and he said two weeks. So I told the developer two weeks, and he said, ‘That’s B.S. It’s not taking two weeks. They’re taking much longer.’”
Vanderheiden’s presentation didn’t dispute that timeframe.
“A subdivision exemption that took 2-3 weeks in 2014 is now taking 2-3 months due to the sheer volume of work,” she said. That includes permitting and public hearings before the city council.
Vanderheiden said her office has seen a steady increase in the complexity of projects and the number of projects reviewed and processed over the last five years. For example, in all of fiscal year 2017, there were two minor subdivisions reviewed, and then in all of fiscal year 2018, there was one minor subdivision reviewed and one major phased subdivision reviewed.
In just the first month of fiscal year 2020 (July 2019), she said her office is already working on one minor subdivision review (under five lots) and is expecting to receive plans for three major phased subdivisions.
“We’re certainly seeing an uptick in the number of subdivisions,” said Jeremy Keene, the city’s Public Works director who is also serving as the interim Development Services director.
According to Keene, the overall pace of development in Missoula is on track in 2019 to be roughly equal to the volume in 2018, when the total market value of construction permitted was $223.6 million. So far this year, 201 housing units have been approved compared to a total of 463 for the entire year of 2018.
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Missoula’s shortage of housing has contributed to skyrocketing prices over the last decade, and Cares’ anecdote reflects a general sentiment among many developers and property owners that the time and money it takes to approve small infill projects can be cost-prohibitive. One developer's lawyer is threatening to sue the city for allegedly unfairly delaying a housing project on the south part of town.
“They’re trying their best, but they’re understaffed,” said Paul Forsting, a board member of the Missoula Building Industry Association. “The building industry is always interested in expediting review. Builders are interested in what infrastructure exists and how many units, but most often it’s how quick can we get this thing accomplished? So timing is super important to the building industry. That’s where things can get negative.”
The city council is currently looking at amending the Townhome Exemption Development ordinance after adopting interim amendments this spring.
“I’m wary they will make it more difficult and make a lot of projects that are currently feasible non-feasible,” Forsting said. “It’s a delicate balance. Minor TED (less than 5 units) has been very effective for infill as it was permitted.”
Forsting said he’s concerned the new amendments will subject TED developments from 2-5 units to the same rules as all TED developments.
“That’s something we need to pay attention to, how much cost that will increase,” he said.
Forsting said two-lot Townhome Exemption Developments in the city have been relatively efficient. In the county, where there isn't as much infrastructure like roads and sewers and water mains, those projects can be cost-prohibitive.
Earlier this year, the city’s Office of Housing and Community Development released a 90-page document suggesting a broad range of policy changes aimed at alleviating the affordable housing shortage here. One of the suggestions was to expedite development review for projects that create below-market housing.
“These projects would not supersede projects already in review, but place them next in line,” wrote housing office director Eran Pehan and her staff in the report. “This could prove a valuable incentive, especially when development review entities are experiencing a high volume of applications for review.”
The housing office also suggested things like reducing or eliminating the minimum parcel size of 3,000 square feet for subdivision development, reducing parking requirements and limiting property setback requirements.
Keene said his office has “had a lot of discussions” about how to speed up and streamline the permitting process since he’s come on board.
“We want to be in the business of facilitating good development,” he said. “When people come in the door with good projects, we want to do everything we can to make that happen. We don’t want to be an impediment to more housing supply out there.”
At the same time, he said, it’s the city’s job to make sure new development doesn’t adversely impact the community by not being well-planned.
“We want to be watching out for all the important things, what the impacts are and how things are mitigated,” he said.