Excessive regulations increase building costs

Lane Cole, former City Manager, City of Chula Vista, California
Bob Friedgen, former General Manager, Helix Water District, San Diego, California
Charles Bras, former City Engineer, San Diego County, California

Imagine you are planning to build a new home or make a major addition to your existing home and you find it will take a year to process the necessary permits. You would likely be stunned! Then you find out those permits will cost as much as $40,000. At this point you would likely be upset and reconsider whether to do the project at all.

Such is the case for any applicant as they process their permit application and pay corresponding fees—be they individual, commercial or needed public works projects. Not even public projects are exempt from over-regulation, despite the fact that they are paid for by the taxpayers. While regulatory processes and functions are important to protect the environment and assure each project is beneficial to the community, the current system has simply grown out of control.

Can you imagine trying to construct Mission Bay or Balboa Park under today's regulatory climate? These two developments simply could not be accomplished today, even though they benefit thousands of San Diego residents and tourists daily, and make the San Diego metropolitan area a very desirable place to live.

So how did we get to this point and how do we address the situation?

Both the number of regulations and regulatory agencies created for our benefit have continued to multiply. This in turn has caused an increase in the amount of time it takes to complete a project—not to mention a tremendous increase in cost. Oftentimes new regulations are a result of small interest groups. The public, who ultimately pays the increased cost, is not aware of this impact.

Regulations, laws and rules are a part of our everyday living. We couldn't live in our society if we didn't have them—such as those that deal with traffic speeds, stop signs, and building codes that ensure our homes, offices and buildings are safe. In recent years our many levels of government have created agencies that operate independently of each other. They have implemented regulations that overlap, are uncoordinated, and often contradict each other. This makes the permit process frustrating, lengthy, and excessively expensive.

The final cost for major projects repeatedly exceeds original cost estimates. It is simply impossible to accurately estimate the final cost of projects that won't be finished for years and involve many regulatory agencies—and those costs end up getting passed on to our communities. Unfortunately, without the cooperation and coordination of the regulatory agencies, needed projects languish and increase in cost.

An example of this problem was the proposal for a 500-megawatt electric generating facility on Otay Mesa. The permitting process started over four years ago and involved 27 regulating agencies—many with conflicting requirements.

The company proposing to build this facility had begun the process before the energy crisis and invested millions of dollars in the permitting process, not knowing if all of the necessary permits would ever be received. Despite the fact that this electric generating plant was needed, the project is still years away from completion. Ultimately the governor's office stepped in and demanded that permits be expedited for all energy-producing projects in California. Several electric generating plants were then granted the required permits in a record time of less than three months. That's only 90 days for a process that has normally taken years!

Why does it take a crisis or a national emergency to get things done? If all permitting agencies, identified at the start of the planning process, would bring their experience and knowledge together in a coordinated effort, projects would be accomplished in less time and at much less cost.

Working to decrease over-regulation will not only benefit communities that need the proposed projects, but will also begin to turn around the maddening cycle of increased time and money for obtaining permits. By stopping the cycle of over-regulation, we can assure that individual homeowners do not meet with the same fate when they decide to move forward with their own projects. In the end, over-regulation costs everyone time and money.

So what can you, as a private citizen, do? Let your elected officials know that over-regulation needs to be addressed on a permanent scale—not just in emergency situations.

Lane Cole, Bob Friedgen, and Charles Bras are members of the San Diego Chapter's Past Presidents Advisory Council and can be reached at gillfillan@bhiinc.com.