Here's a cost-free stimulus measure that Pennsylvania officials should consider: a blanket extension of existing building permits through the end of the downturn.
Almost every construction project requires permits. Obtaining them from local, county, and state agencies can be an arduous, time-consuming, expensive, and - worst of all - unpredictable process, draining the resources of landowners, developers, and the government itself. Once acquired, permits expire in anywhere from one to five years.
The current downturn has put many projects on hold due to a lack of demand (for housing, for example) or diminished access to financing. As a result, permits acquired before or since the downturn are expiring.
If developers and landowners lose their permits and are forced to reapply when the economy recovers, construction projects will be further delayed. This will prevent job creation, unnecessarily extending the recession.
Some states have already responded. In September 2008, New Jersey lawmakers passed a bill that extended existing permits through July 1, 2010, with a six-month phaseout period. The state recently went further, extending development permits until Dec. 31, 2012. Several other states have passed or are considering similar legislation.
Now Pennsylvania must act. Two bills in the state legislature (House Bill 1055 and Senate Bill 569) would get the job done by extending building permits to Jan. 1, 2013.
It should be noted that, while most development has slowed to a crawl over the past couple of years, state and federal lawmakers have continued to pass more regulations that complicate the development process, threatening further delays when projects begin to move forward again. A permit extension act would ensure that projects that are already approved won't be subject to these new regulations (with the exception of certain environmental statutes).
Extending permits is also crucial to protecting property values during the downturn. Fear and uncertainty in the lending and development industries negatively affect the value of all of properties. Permit extensions would eliminate that fear and uncertainty, easing doubts in the credit market about the viability of projects once economic conditions are right.
Construction has long been the backbone of our economy. Preventing further development delays is an easy, inexpensive way to avoid exacerbating the economic conditions we're facing.