A ‘danger to our existence’: Why San Jose home builders say they can’t start new projects

Despite continued demand for new construction and remodeling
projects, San Jose is issuing only a fraction of building permits
it did before the pandemic hit the region and now many home
builders and contractors fear their livelihood is at stake.

To avoid financial ruin, some have laid off staff and pivoted to
smaller projects that don’t require permits — alternatives they
initially turned to when the county banned construction for six
weeks at the beginning of the region’s shelter-in-place order to
stop the spread of the virus.

“I’ve maintained a skeleton crew and tried to move forward,
but if they don’t issue us permits then people that don’t have
the means will go out of business,” said Mehdi Vatani, CEO of
Santa Clara-based Valley Home Builders. “It’s a clear and
present danger to our existence right now.”

During the first full three months of the Bay Area’s
shelter-in-place orders — April, May and June, the city of San
Jose issued about half of the number of building permits given out
during the same time frame last year. Permits issued for new
construction, such as granny units, dropped by about 50% and those
handed out for additions or remodeling projects were down 85%.

Cheryl Wessling, the spokesperson for the city’s planning,
building and enforcement department, blamed the plunge on a
combination of the initial freeze on construction, the transition
from an in-person permit process to one done through emails and
fewer people filing project applications because of the
pandemic.

Vatani, however, said he’s seen an influx of interest from
homeowners ready to renovate a portion of their home or add on a
granny unit in recent months. But he can’t get the ball rolling
without the required permits which he’s been waiting four months
to acquire.

“Everyone in our industry is struggling and if the city
doesn’t start pushing permits and helping us, a lot more
contractors will have to shut their doors permanently including
us,” he said.

Before San Jose City Hall shuttered due to the county
shelter-in-place order in mid-March, hundreds of builders would
come to the city’s permit center every week. They would obtain a
number — similar to the DMV — and wait up to a few hours for
their turn in line, talk to a permit specialist, sort out their
documentation, make a payment to the cashier and then walk away
with a building permit in-hand that day for projects that didn’t
create significant changes to a home — including first-floor
additions, kitchen and bathroom remodels and construction of
accessory dwelling units of less than 500 square feet.

But when the city’s permitting staff moved out of city hall
and into at-home offices, all those services, appointments and
permit processes moved to email transactions. Instead of an
organized ticketing system that directed a builder to the right
person, the city’s permitting staff were now tasked with manually
triaging the email�requests of hundreds of builders each week
remotely.

“We think we’ve done a great job with the transition, but
we’re operating under emergency circumstances,†Wessling said.
“Customers just cannot expect the same level of service they
received with the highly systemized in-person operation.â€

Instead of waiting a few hours in city hall to get their
questions answered and projects approved, builders and contractors
now say they’ve found themselves waiting weeks for replies to
their emails or calls to employees in the city’s permit
center.

“It’s like a black hole,†Vatani said. “I understand
we’re all dealing with COVID, but there has to be a different
way.â€

Nicholas Yegge, owner of Heartwood Residential, Design + Build,
requested an appointment with the city regarding a permit for a
kitchen remodel in mid-May — an authorization that typically
could be handled within a single day by visiting the city’s
permit center. It took Yegge one month just to secure an
appointment, and now an additional month after that, he’s still
waiting for his permit.

After weeks of unanswered emails, Yegge finally received a
response from a city permitting employee on July 21 telling him
that the application had still not been completed, not forwarded to
review staff and that there were no notes from city staff.

“I’m sure they’re trying their best but it’s just not a
working system,†Yegge said in an interview this week. “I have
plenty of work if I could get permits but because I’m not able to
pull permits, I’m looking at next week and it’s empty right
now.â€

When the county ordered most construction to stop at the start
of the shelter-in-place, the city also halted its building
inspections and shifted its priorities from issuing building
permits to processing new permit applications so they could be
ready when construction was permitted again.

Yet, when the construction ban was lifted on May 4, many of
those permits were not immediately issued. After nearly three
months of working through the permits it had put on the backburner
during the ban, the city is just beginning to return to its
pre-shelter-in-place permit numbers. For instance, the city handed
out just eight permits for remodels or additions in April, 59 in
May and then 150 in June.

Contractors are now getting inspections from the city on
completed projects, which used to take three to five weeks to
arrange, within a matter of three days — another indicator of the
lack of projects currently permitted and in the works, they
say.

Related Articles

Wessling declined to comment on when the city might reopen its
permit center. She also declined to say how many permit
applications were still awaiting approval, noting that the number
would include permit applications that builders or contractors
decided to drop and permits held up by those who still need to
complete their documentation — not merely a delay on the city’s
behalf.

“The plan review process through a remote system is inherently
a slower one,†she said. “Like all things related to COVID we
do ask for patience because it naturally changed the way we’ve
had to work.â€

Source: FS – All – Real Estate News 1
A ‘danger to our existence’: Why San Jose home builders say
they can’t start new projects