Development Services seeking more staff this summer

The Development Services Department, which conducts inspections and approves permits for new housing, remodeling and commercial construction, is facing an ever-increasing volume of work, as Assistant City Manager Rodney Gonzales and department Director Denise Lucas explained at Tuesday’s City Council work session.

In order to meet demand, the department is requesting approval to hire 41 new full-time equivalent positions this summer, Gonzales said, while acknowledging that Council approved 50 new positions for the department in 2018. (Gonzales was director of the department at that time.)

Recently, Gonzales said, the city has experienced an increase in housing permit applications. “We’re not alone in the Austin region. Other cities in the region have experienced it and other regions in the country have experienced it as well. It’s a phenomenon that’s catching a lot of us by surprise post-pandemic. It is of concern to us and that’s why we view it as an emergency and are coming for a midyear budget adjustment,” he said.

Lucas told Council, “We’re experiencing a tremendous amount of growth in our residential and commercial areas,” noting that any project with three or more residents is considered commercial. The department is seeing a lot of multifamily projects as well as single-family homes and remodels. “We are at our maximum throughput in reviewing and permitting those projects so that we’re not able to meet our forecast review time with the staff that we have,” she explained.

Lucas described several changes her department has initiated in order to improve service delivery. The department has cross-trained inspectors so that one inspector can perform multiple inspections on a site visit, saving time for everyone involved and reducing the department’s carbon footprint.

The department also recently implemented a policy of taking every Friday to “clear comments” in order to get documentation back to the developers faster. But, Lucas added, “We enjoyed a two-week reduction in our review time that only lasted two weeks because then volumes accelerated again. So we’re now back out to an extended review time, which is unacceptable to our customers.”

Council Member Alison Alter wanted a full explanation of the need for the new positions and the costs. She posed a number of questions both during the meeting and in writing, which staffers answered at length.

Alter asked about the relationship between hiring new employees and potential changes in the fees DSD charges customers. Staffers responded: “(P)rojections from the Capitol Market Research group’s annual forecast indicate that Development Services will experience growth in both commercial and residential permits (2021-2025). Anticipated revenue from this increase in volume will cover the costs for the requested staff, without an increase to fees in FY22.”

According to staff responses to Alter’s questions, DSD had a total of 5,361 residential and commercial permits in review in December 2019. By April 2020, that number had fallen to 4,752, but by July 2020 was up to 5,927. The number had fallen to 4,501 in February 2021 and shot up to 7,413 in April.

Staffers are asking Council to approve the new employees this week so they can start hiring in July and have the new staff trained by the end of the current fiscal year. According to information provided to Council, the department will fund the new hires by identified cost savings of $150,000 in the current year’s budget.

Because DSD is an enterprise department that charges fees for its services, Lucas said the new positions will be offset by revenue increases – but not individual fee increases – in the Fiscal Year 2021-22 budget. Overall, the annualized cost of the new positions is estimated at about $4.4 million for the upcoming year.

DSD says the cost of the new employees will be fully offset by the increased revenue that will result from the increased volume of permit applications.

The department currently has a total of 19 temporary employees who were hired through use of third-party contracts.

Photo by Tony Webster from Minneapolis, CC BY 2.0, via Wikimedia Commons.

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.