Report on the Costs, Savings & the Business Case

for Streamlining the Building Regulatory Process

Through the Use of Information Technology



Prepared for


U. S. Department of Energy

Building Technologies Program



Order No. DE-AP01-06EE11165.A000



Prepared by


National Conference of States on Building Codes and Standards, Inc.

505 Huntmar Park Drive, Suite 210

Herndon, VA 20170

703 437-0100 ext. 238


Robert C. Wible, Project Director

Carolyn Fitch, Chief Researcher



December 15, 2005



Report on the Costs, Savings and the Business Case

for Streamlining the Building Regulatory Process

Through the Use of Information Technology



A.    Introduction/Executive Summary of the Business Case – Why Streamline? Costs, Savings and Benefits


Buildings play a critical role in the life (and safety) of our country. Today over 90% of the nation’s commerce is generated within, moves through, or is stored within buildings. Buildings consume over 40% of our energy, comprise over 50% of the wealth of the U. S., and shelter all Americans. In addition, new building construction and renovation generates over $3 billion of business activity each year and, together with real estate, comprises over 20% of the Gross Domestic Product.


Hurricanes like Katrina and the events of 9/11 have demonstrated the critical importance of adequate building design and effective building codes administration and enforcement both to the safety of our citizens and to the economic viability of our communities.


Despite the critical importance of building codes and standards, the building regulatory system (in which over 40,000 jurisdictions adopt and or enforce building codes) is highly fragmented and in far too many communities is either under funded or inefficient. In addition, many communities still use administrative and enforcement processes and structures that have been little changed in 50 years. Regulations governing the design and construction of buildings contribute up to 20% of the cost of construction. Where they exist, inefficiencies in the regulatory process are costly. For example, a single day’s delay caused by the regulatory process adds an additional $100,000 to the cost of mid-rise multifamily housing. Regulatory inefficiencies clearly are costly to our nation.


Such regulatory inefficiencies have caused communities to learn this lesson the hard way either by losing businesses and jobs as companies relocate to communities with regulatory systems that are more timely and predictable or by suffering far greater losses of life and property in natural disasters due to poor code enforcement.


Streamlined building regulatory practices combined with the effective and efficient use of information technology have enabled jurisdictions ranging from the size of the city of Los Angeles (population 3,641,000) to Cobleskill, NY (population 4,533) to reduce the regulatory cost of construction by up to 60%. Streamlining also enabled jurisdictions to handle significant increases in construction volume without increasing staff and be better able to respond to and recover from disasters.


These and similar streamlining benefits and savings in other jurisdictions have been documented by the Alliance for Building Regulatory Reform in the Digital Age, a public-private partnership, and are shared in this report for your jurisdiction’s consideration.


B.    Current Building Codes Administration and Enforcement Environment


Consider The Following


Why is a streamlined, effective and efficient building regulatory process important to your community? Why is it important to your construction community, consumers, elected officials and to your building department? Consider the following:


       “I have been told by firms in my state that if they miss one business cycle they are dead in today’s marketplace.” Former Utah Governor Michael Leavitt at National Governors Association Winter Meeting in February 2000.


       “A major developer of mid-rise residential buildings told us that a single day’s delay in the county’s building regulatory process costs his firm $100,000 in added costs. This is why we have streamlined our building regulatory system.” Sophia Zager, former Director of the Office of Building Code Services for Fairfax County, Virginia.


       “In maintaining the vision, values and goals of the City of Milpitas, certain policies have been established in order to better serve the business and residential communities and reduce the time spent processing plan checks, permits and inspections.


These policies were developed with the advice of industry and applicants and with the aim to balance the responsibility of the Building Inspection Division and the needs of the business and residential community.


Some major tenant improvement projects require very aggressive schedules for plan check completion and permit issuance. Municipalities need to recognize the needs of industry and respond accordingly.


Residential construction, both new and remodels, all must maintain certain construction schedules, which, if not met, may create an economic impact on the contractor or the owners. Although building departments may not resolve all problems, it is important that every effort be made to ensure a simple and fast plan check process and a timely and equitable inspection process.” City of Milpitas, California, Building Department Service Philosophy.


       “Streamlining our regulatory process and applying information technology to our codes administration and enforcement program enabled the City of Los Angeles to handle an 88% increase in construction activity with only a 1.5% increase in staff and at the same time reduce the wait time for codes services to our customers by up to 90%.” Andrew Adelman, Los Angeles Director of Building Codes Administration.


       “We are pushing hundreds of projects throughout state government to streamline business regulatory processes. E-permitting is an important part of this effort and shows our commitment to industry to make Oregon an even better place to do business.” Oregon Governor Ted Kulongoski, Spring 2005.



       “Because the Building Department is the single most important agency in the development process, its management and operations needs to be as efficient as possible.” 1999 Report on Housing in New York City by Salama, Schill and Startk.


       In the aftermath of Hurricane Katrina, attendees of a statewide Louisiana Recovery and Rebuilding Conference repeatedly identified one of the state’s major needs is a streamlined government with more effective and efficient enforcement of a stronger statewide building code.


The Current System


In series of surveys conducted in 2001-2003 by the Alliance for Building Regulatory Reform in the Digital Age, it was estimated that only about 8% of the nation’s 44,000 jurisdictions that adopt and/or enforce building codes had undertaken regulatory streamlining and applied information technology to their codes administration and enforcement program.


In most jurisdictions, building permits can only be obtained by visiting the building department during regular Monday-Friday 8 to 5 business hours. This may require one or more trips to the building department and perhaps to several other departments in the city or county government if electrical, mechanical, plumbing, and structural permits are not available from a single agency.


Likewise, the submittal of plans often requires one or more visits to one or more governmental agencies, all done in person and all done during the Monday-Friday “regular” business hours.


Once complete building plans have been submitted, those plans are hand carried between plan reviewers with the client infrequently having any information regarding where the plans are within the review process until the plans are either rejected or approved.


Inspections are a labor intensive process for builders and consumers and for the jurisdiction as well, frequently requiring several days of waiting between the time that an inspection is called in to when the inspection is conducted and the results are provided to the builder or homeowner.


While some building departments have functioned very effectively without undertaking regulatory streamlining or making use of information technology in one or more administrative and enforcement processes, there is growing pressure on building departments to provide the above services not only faster but frequently with fewer financial and manpower resources.


Adding to that pressure are:


-       the pending retirement of the “baby boomer generation” who comprise the majority of building department plan review and inspection staffs;


-       the increased role of the building department in disaster planning, mitigation, response, and recovery and the need to receive or provide assistance to building departments in other jurisdictions in response to and recovery from large scale disasters;


-       the growing demand from citizens and from builders and contractors for faster services including online permit applications and plan submittals; and


-       increase economic competitiveness between communities within the same region and between regions of the country.


C.   Why Streamline and Use Information Technology?


To address the above forces, more jurisdictions are looking at the benefits of working with the stakeholders in their community and assessing their current building regulatory system to determine if streamlining and the application of information technology will help them provide more effective and efficient services.

Streamlining means identifying and removing barriers to the effective and efficient delivery of services. Streamlining modifies or restructures day-to-day operations of an agency. This is to eliminate or significantly reduce areas of duplicative work, overlapping and conflicting rules, regulations, processes, and procedures that might be confusing or that add unnecessary time and cost to the delivery of services to the community. Streamlining looks at both public purpose and process of agencies. For building departments, the objective is more effective and efficient administration and enforcement for the building codes and standards that are adopted. Streamlining is not regulatory abandonment.


Once jurisdictions have completed an assessment of their existing building regulatory process and taken actions to remove or reduce the regulatory barriers that they identify, many jurisdictions have looked at the costs and benefits of either purchasing or developing information technology to increase the efficiency of their operations.


Among the codes administration and enforcement processes to which information technology has been applied are: online permit processing and tracking, electronic plan submittal, plan tracking and review, Graphic Information Systems (GIS), online tracking of licensed contractors, scheduling of inspections, and conducting and reporting the results of field inspections including damage assessment after disasters.


Until recently, information regarding the costs, savings, and benefits of applying information technology to one or more codes administration and enforcement processes was difficult to obtain. The Alliance for Building Regulatory Reform in the Digital Age compiled and posted on the Alliance portion of the NCSBCS website ( information on some of the savings that jurisdictions were achieving from the use of I.T. and provided contacts to those communities that were reporting such savings.


D.   Sample I.T. Costs from State/Local Governments


In the winter of 2004-2005, the Alliance, with funding from a partner, the Institute for Building Technology and Safety (IBTS), conducted a national survey to acquire accurate data from jurisdictions concerning the costs of applying I.T. to their building codes programs and the savings that those communities were achieving. The survey documented substantial savings for jurisdictions of all sizes and in all parts of the country ranging from Los Angeles and Chicago and Miami-Dade County with populations in the millions to towns like Cobleskill, NY, and Warrenton, MO, with populations of 5,000. Where such data was made available, the Alliance was able to calculate an average Return on Investment of 4 months for acquiring and using I.T.


In May 2005, the Alliance, through its Secretariat, NCSBCS, released the above report (a complete copy of which can be downloaded from the NCSBCS website). Provided in this section and the next (Sample Benefits & Savings) are some of the costs, savings and benefits that were reported by the 101 jurisdictions responding to the survey.


Out of the 101 respondents, information technology was being used in the following codes administration or regulatory processes:


63 – Permit applications and processing

36 – Plan submittal and processing

29 – Some aspect of plan review

52 – Licensing (either contractor, building official or both)

59 – Inspection Scheduling

30 – Conducting Inspections

29 – Other functions (including GIS, code change submittals, property maintenance)


The survey documented that the costs for acquisition (or development), training, and maintenance of information technology for the responding jurisdictions varied depending upon the size of the jurisdiction and the number of codes administration and enforcement functions to which I.T. had been applied.


In general, the larger jurisdictions tended to have more homegrown programs or made more extensive revisions to off-the-shelf software packages than did smaller jurisdictions. Many jurisdictions noted that they were able to reduce the cost of software development or purchase when they first streamlined their process prior to applying I.T.


General Survey Findings on Costs


Large to medium sized cities responding to the survey reported acquisition costs ranging from $4,000,000 in Chicago (population 2,850,000) for a package of both in-house and purchased software covering 7 different codes administration and enforcement functions to the moderate sized city of Chula Vista, CA, (population 173,000) that paid a total of $38,182 for a software package covering 6 administration and enforcement processes.


A range of costs for very small jurisdictions ran from those for Cobleskill, NY, that purchased a $5,000 permit application package, a $1,000 inspection scheduling package, a $1,000 master plan package, and a $1,000 fire archive index package from a major software vendor to those of Durham, NH, (population 9,024) that purchased a software vendors permit application package for $1,800.


As expected, training costs varied with the size of the jurisdiction and number of processes to which I.T. had been applied.


Training costs reported by Phoenix, AZ, (population 1,321,000) were $25,000 for an inspection scheduling system, $80,000 for a plans submission and review package, and $100,000 for a remote inspections program that is being used by 151 inspectors.


Training costs for Cobleskill, NY, were $10,000 for permit applications process, $2,500 for inspection scheduling process, $3,000 for the master planning software, and $3,000 for the fire archive index.


Where reported, total ownership costs (maintenance, purchase of accompanying hardware, license agreements, etc.) varied according to the size of the jurisdiction and number of functions to which they applied software. A number of jurisdictions uniformly cautioned that future long-term cost of their I.T. systems depended upon the jurisdiction retaining ownership of their data.


In the study, 12 jurisdictions with populations of less than 25,000 uniformly noted that significant savings in time and resources were being achieved with relatively inexpensive software applications for such services as permit applications, inspections, inspection scheduling and contractor licensing. Most of these jurisdictions purchased existing software packages from a wide range of vendors. Most also reported that in applying the software to their programs that minimal adjustments were necessary to either their operation procedures or to the software.


E.    Sample Savings and Benefits from Using I.T.



Jurisdictions of all sizes ranging from Los Angeles, CA, to Cobleskill, NY, provided data documenting reductions in processing time from 20% to 80% with the application of information technology to one or more codes administration and enforcement processes. Jurisdictions also reported marked improvements in their codes enforcement records and in their relationships with their clients/stakeholders (the construction industry, citizens and elected officials).


The project final report provided a composite survey of costs and savings for 43 jurisdictions. Typical reported savings are the following examples:


       For large cities:


-       Los Angeles reduced permit application times from 15 minutes to 1 minute for the city and from 2 hours to 10 minutes for the customer and cut the time it took for the city to conduct inspections from 10 days to 3 days.


-       Chicago reduced permit-processing time from 45 minutes to 30 minutes for the city and from an average of 8 hours to 2.5 hours for clients.


       For a large county:


-       Ventura County, CA, (population 753,000) over 6 years saved $1,000,000 in costs and 3

staff positions by applying I.T. to their permit issuing and inspection processes during a

time when the building department’s workload increased by 80%.


       For a medium-sized city:


-       Louisville, KY, (population 529,000) reduced the time it takes to process contractor

licensing from 1.5 hours to 30 minutes and from 30 minutes to 20 minutes for the contractor.


       For a medium-sized county:


-       Clackamas County, OR, (population 334,000) reported their online permit process saved

the county 2 staff positions and over $40,000 each year and cut client time by 70% by

making the service available to them 24/7/365.


       For a small town:


-       Cobleskill, NY, reported their online permit application process reduced the amount of time

for the town’s employees to perform permit functions from 1 hour to 15 minutes and cut the client’s time from 3 hours to under 1 hour.


       For a small county:


Forsyth County, GA, (population 98,000) reduced inspection scheduling from 15 minutes to less than 1 minute and reduced waiting times for clients from 24 hours to less than 6.


       State savings varied depending on their degree of regulatory oversight and authority. For example, Ohio cut in half some administration and enforcement function timeframes.


Sample Benefits


The survey respondents reported the following as the major benefits that they derived from the application of information technology to one or more of their codes administration and enforcement processes.


       Improved the overall relationship between the building department and its clients (stakeholders).


       Enabled the jurisdiction to share critical data with other agencies enhancing the government’s overall effectiveness and efficiency.


       Enabled the jurisdiction to offer a service 24/7/365.


       Enabled the jurisdiction to better plan for, respond to, and recover from natural and manmade disasters.


       Improved the jurisdiction’s economic competitiveness with other jurisdictions by offering more timely services.


       Provided more effective codes enforcement (less items fell through the cracks).


       Freed the building department staff to work on other required duties.


       Allowed the state a mechanism to provide greater statewide code uniformity.


       Facilitated the completion of complex federal mandates (including providing data/information to FEMA in wake of a disaster).


The brief case studies of five jurisdictions that applied I.T. to their codes administration and enforcement programs provide further details on these benefits.

F.    Case Studies – Five Jurisdictions


Louisville, Kentucky


Since 1991, the City of Louisville and Jefferson County have been applying information technology to improve services and reduce costs through shared information technology.

In 2003 these two governments merged and implemented a GIS-based system that is virtually paperless. Building permit applications are available online and are processed electronically throughout the agency. Field staffs work better and can even use wireless computers to document their inspections creating a real time system of permit inspection data.


As a result, over the last 15 years permit application times have been reduced by 50%, the licensing applications times have decreased by approximately 75%, and inspection times have decreased by 50%, all while handling an increase in the annual number of permits and licenses being processed in the city.


State of Oregon


One of 22 states with a mandatory statewide building code, the State of Oregon’s Building Codes Division provided education and training, code interpretation and appeals services and, for some jurisdictions lacking a building department, provided plan review and field inspection services.


In the mid-1990’s, the chief building official of the state became involved in a national streamlining initiative and decided that his state would benefit from learning the best practices of his colleagues elsewhere in the nation to improve customer services not only for his state agency but for local building departments as well. In addition, the Building Codes Division co-sponsored with associations representing the construction industry and state and local government a series of workshops across the state to identify areas where existing building codes administration and enforcement rules, regulations, processes, and procedures were creating barriers to affordable housing and other types of construction.


Intel Corporation, a major employer in Oregon, supported these efforts by the Building Codes agency. In 1999 state legislation was introduced and passed to establish in the metropolitan Portland area a regional permitting program for minor electrical and plumbing installations, standard permitting forms and processes, standard fee methodologies, a dispute resolution process, and a process to ensure consistent applications of code in the Portland tri-county area.


The regional permitting program strengthened code compliance and reduced regulatory costs to consumers and the construction industry. The program proved so successful that it was expanded statewide within a year with the state launching a statewide online permitting service for minor labels in December 2004. In 2005 a pilot project establishing online permit processing within the Tri-County area was put in place as a demonstration project leading to a statewide online permitting system. Oregon estimates that a statewide online system will save 10% of construction permitting costs that equals an annual savings of approximately $7.5 million. (For more information on the Oregon program visit


Los Angeles, California


Los Angeles, the country’s second largest city, functioned in a manner similar to that of most large cities in the mid-1990’s. There were few applications of information technology to their codes administration and enforcement processes, permit applications, plan submittals and inspection process were labor intensive and customers frequently encountered two to three hour-long lines at permit counters. Moreover, there were a four to five day wait for inspections, plan reviews took an average of 10 weeks to perform, and there were 100 different phone numbers that people had to use to contact code enforcement personnel. Lastly, there were no workload indicators to track volume of construction and the manpower needed to perform various codes administration and enforcement.


Complaints from consumers and the construction industry, including threats to either relocate some firms or expand facilities in other communities with less cumbersome regulatory systems, brought to the attention of elected officials the need to streamline the building codes administration and enforcement processes.


The city subsequently hired as its chief building official the former chief building official of San Jose, CA, who had championed regulatory streamlining as a part of a major region-wide campaign to keep the high tech community based in the Silicon Valley region.


Meeting with stakeholders, the new building official targeted several administration and enforcement processes for immediate restructuring. With initial funding from community development bonds, the city restructured its codes administration and enforcement program and applied information technology to the permitting process, plans tracking, scheduling of field inspections, and finally to field inspections.


Over a seven year period Los Angeles, streamlining first and applying information technology second, made the following improvements in the timeliness and quality of their codes administration and enforcement services:


       There is now one toll-free number (1-888-LA4-BUILD or 311) to access all of the Department of Building and Safety employees.

       The City has four one-stop service centers and out of 534,000 permits issued each year by those centers over 92,000 are issued via the Internet.

       Average time for processing permits has dropped from 2-3 hours to between 30-60 minutes.

       Average time for plan checks for most projects has dropped from 6 weeks to 10 days.

       Average wait time for an inspection once it had been requested was reduced from 4-5 days to 24 hours.

       The city doubled the number of code enforcement cases it could close in a year.

       The city significantly increased its number of rehabilitated buildings and abated over 4,100 abandoned and nuisance buildings.


The city also accomplished the above with an 88% increase in construction volume and only a 1.5% increase in staff.


Today, Los Angeles has won numerous national awards for regulatory streamlining and has created a positive working relationship with citizen groups, the building design and construction industry, and with businesses that are either moving to or planning to expand their existing facilities within the city.


Moreover, the application of information technology to a streamlined building regulatory process has enabled Los Angeles to better plan for and establish a better response and recovery program for handling both natural and manmade disasters.

Richmond Heights, Ohio


A suburb of Cleveland, OH, Richmond Heights (population 11,000) is comprised largely of single-family residential structures and several commercial districts including a major shopping mall.


With 40% of their citizens close to or at retirement age and on fixed incomes, keeping the quality of government services high while keeping their costs as low as possible is a major pressure on the city council, the mayor, and on the building department.


Faced with cost constraints and high expectations for quality government services, the building department looked at ways of restructuring their program to be as effective and efficient as possible while retaining the expertise and staffing necessary to handle several new residential development and large building rehabilitation projects. The city acquired online permit processing and plans tracking software.

As a result, Richmond Heights reduced the cost and time to provide such services by 40% and enabled the city to share its chief building official with two other communities in the greater Cleveland area, further keeping its costs low while providing timely and quality service.


Cobleskill, New York


A resort community, Cobleskill, NY, found its population each summer swelling from 5,000 to 30,000. Consequently the demands for building codes administration and enforcement functions far outstripped the size of their codes department’s staff.


Moreover the community heard frequent complaints from the owners of vacation cabins and cottages that it was tiring for them to travel from the metropolitan New York City region up to Cobleskill just to stand in line at city hall to pull a building permit for improvements or repairs they were making to their second homes.


Faced with the seasonal peak workload, Cobleskill looked into the benefits that could be derived from the use of online permit applications, inspection scheduling, and electronic plan submittals, making their building department open 24/7/365 and eliminating or significantly reducing trips for summer residents and long lines at city hall.


The impact of the use of software systems was to create happier summer residents, a less stressed city staff, and reduced overall costs to the jurisdiction (including the cost of software and hardware) by 30%.


G.   The Business Case for Streamlining


The Case for the Construction Industry & the Business Community


The construction industry -- architects, engineers, contractors, building product manufacturers and suppliers, the real estate industry -- are immediate beneficiaries of a predictable, effective and efficient building regulatory system. These are the people who interact day-in and day-out with the building department in jurisdictions that adopt and/or enforce building codes.


Timely online permit processing, electronic plan submissions, tracking, and in a few jurisdictions electronic plan reviews, coupled with voice response systems for scheduling inspections and electronic field inspection and inspection reports significantly reduce the amount of time these companies have to wait for these services.


Los Angeles’ use of information technology as noted above has reduced overall time spent within the building regulatory process for the construction industry by 60%. This isn’t from dropping or lessening regulations, or codes and standards governing construction but merely administering and enforcing those codes and standards more efficiently.


Being able to apply for permits, submit plans, or call to schedule inspections any time of the day or night and without having to wait in service lines at city hall is a major cost saving to the construction industry.


For example, the reduction in the amount of time a home builder has to wait for inspectors to show up on site means much less down time for their construction crews and also means that fewer days are needed for the construction to be completed reducing the amount of interest the builder has to pay the bank for their construction loan.


A recent housing costs study in New York City estimated that a single day’s less construction time for a high rise residential building saves the builder $10,000 in interest payments. No small savings when building departments through the use of information technology are reducing the overall number of days a builder is within their part of the regulatory system from 100 days to 65!


The business case for streamlining using information technology is equally strong for the construction industry’s clients – company and building owners, building managers and homeowners.


Consider the Case of INTEL in Oregon


One of the nation’s Fortune 500 firms, the Intel Corporation, in the 1980’s fully applied information technology to the process of designing, building, and operating their computer chip plants. For Intel and other high tech firms “speed to market” is everything, as each new improvement in computer chip efficiency in general lasts only 18 months before another technology breakthrough makes a chip outdated.


Because of the highly competitive nature of their industry, Intel reports that a single day’s delay in the opening of a chip processing facility costs the firm $1,000,000 in time money value.


Intel spends $2 billion (include of interest and the cost of money) on the construction of a large chip facility. Included in that cost is the amount of time required by the permitting, plan review and inspection processes of the building department of either the state or local government in which the facility is being constructed. Intel designs all of their production facilities using computers. The facilities are designed to meet current model building and fire codes as well as the special needs of the chip producer.


Intel reports that it takes between 14 and 16 days of work by their engineers and architects just to convert their building plans to meet the state or local building codes of the jurisdiction in which that building is being constructed. That timeframe translates into a $14 to $16 million cost to Intel out of its total $2 billion project.


Given the need for “speed to market” and the $1,000,000 per day costs to Intel for any delays in the construction process, the effectiveness and efficiency of the building regulatory system of states and their localities plays a major role in determining where Intel will build a new or expand an existing production facility.


When Intel is considering such construction in the United States, the corporation lets each of their existing production facilities in Arizona, New Mexico, California, and Oregon compete with each other to submit the most cost effective construction proposal. A major cost factor in those proposals is the cost and amount of time needed to move through the building regulatory system in each of those states and localities.


Regulatory streamlining undertaken by jurisdictions in the State of Oregon over the past few years, including online permit processes and special inspection systems, facilitated Intel’s decision four years ago to build a new chip plant on an existing Intel site in the Portland suburb of Hillsboro.


That plant cost $2 billion to build, was completed in just 18 months, and was opened by Oregon Governor Ted Kulongoski on April 26, 2003. At start-up it employed 1,000 Oregonians and 800 more employees were added in 2004. That one facility provided 1,800 new jobs and also employed Oregonians in constructing the new facility.


More importantly those are jobs that didn’t leave the greater Portland area.


Storm Recovery in Richmond, VA – Lastly, and in the wake of the hurricanes that hit the nation in 2004 & 2005, a streamlined codes administration and enforcement program and effective use of information technology can aid a community in better planning for, responding to, and recovering from a natural (or manmade) disaster.


A streamlined system in the City of Richmond, VA, (population 190,000) coupled with the use of the city’s Graphic Information System (GIS) enabled that jurisdiction to speed up widespread recovery efforts in the aftermath of major flooding in 2004. GIS linked to zoning, land use and building plans information was used to electronically record the location of damaged buildings and the cost of the damage. The information then was rapidly transferred electronically to FEMA and to the state.


Rapid damage assessment, coupled with online permit processing and plan submittals also can significantly reduce the amount of time it takes to get businesses back up and running in a community, putting people back to work and jumpstarting the local economy.


The Case for Consumers


There are several aspects of the business case for regulatory streamlining and the use of information technology for consumers. These start with reducing the regulatory cost of new homes and businesses in their community by 40% to 60% and continue through reducing the amount of time that citizens have to spend applying for building permits for renovations or other improvements to their homes.


Cities like Milpitas, CA; Richmond Heights, OH; Salem, OR; and Richmond, VA all looked at the need to provide more affordable housing within their communities and turned in part to the use of information technology to help reduce at least the costs associated with regulatory and administrative delays that were occurring due to non-streamlined processes.


A simplified permitting and plan review system that uses information technology also has helped a number of communities increase the likelihood their homeowners actually obtain permits for home repairs and improvements that require some degree of oversight, thus reducing the potential for unsafe construction. GIS systems, online access to as-built plans, and damage assessment software have been useful in California, Florida, Louisiana, and Virginia in preparing for and responding to disasters. After Katrina, New Orleans has been using a software package that calculates the ballpark costs for home repair that are recorded in damage assessment reports.


In addition, the use of online permit processing, plan submittal and tracking, inspection scheduling, and field inspections have proven effective in speeding up the process of rebuilding a community after a natural or manmade disaster, helping residents not only get back into their homes sooner but also back to their jobs in the community.


The Case for Elected Officials: Keeping Companies and Jobs in the State/Community


Recent surveys of public confidence in federal, state and local governments have shown further erosion of public confidence in elected officials. A trend that began in the 1980’s and led to such popular reforms as property tax abatement, term limits, and expansion of recall powers of the electorate, had forced elected officials today to face greater public pressure to demonstrate not only strong leadership skills but skill in having government agencies provide effective and efficient services to both the public and to the jurisdictions business communities.


As noted in the New York City study cited earlier, for many communities the building department is “the single most important agency in the development process” and its “management and operations needs to be as efficient as possible.”


Elected officials in Silicon Valley recognized this in the early 1990’s when several large computer technology firms left their region for a more business friendly Austin, Texas.

Austin, which itself had nearly lost some if its businesses in the late 1980’s, due in part to a burdensome building regulatory system, had streamlined their zoning, land use, and building codes administration and enforcement functions by shortening the amount of time it took to move through those regulatory processes.


Drawing upon the systems management expertise of their software firms, elected officials in San Jose, Palo Alto, Sunnyvale, and other South Bay area communities, formed an effective stakeholder work group to identify and remove regulatory barriers to more effective and efficient codes administration and enforcement. Through such reforms as restructured building departments, reducing from 300 to 3 the number of technical provisions that were different within the building codes adopted and enforced by 27 jurisdictions within their region and adding information technology to the codes administration and enforcement process, elected officials and their building departments were able to retain and help existing firms expand within their region, keeping Silicon Valley the capital of the nation’s information technology industry.


As noted earlier, having a streamlined codes administration and enforcement process and access to online permit processing, electronic plans submittals and reviews, coupled with a Graphic Information System can significantly help a jurisdiction prepare for, respond to, and recover from disasters.


For example, after Katrina, software and laptop computers enabled the City of New Orleans to do 101,000 damage assessments in four weeks. After Hurricane Charley, Charlotte County, FL, was able to speed up permit applications and field inspections by putting in place software and hardware programs for those functions. These efforts aided the county in preparing for the 2005 hurricane season that also brought devastating storms to their citizens and businesses.


The Case for Building Departments


The business case for streamlining and use of information technology for the building department is a sum of all of the above business cases. Providing more timely and less costly and more effective code administration and enforcement services to the citizens and construction and business communities provides not only satisfied customers but also assembled allies in helping the building department to maintain adequate funding support for both needed staff and the software and hardware to operate an effective and efficient building regulatory system.


Salem, OR, is a good case in point. In 2004 the city brought on board a new building official with experience in the State of Oregon’s statewide streamlining initiative. In meetings with the city’s construction community and with citizen groups, a series of existing barriers to more effective and efficient codes administration and enforcement were identified and a restructuring of the building department was undertaken. The barriers included a major backlog in permits, plan reviews and inspections, and an adversarial relationship between the building department and the construction community.


In taking a serious look at its staffing, workload and other aspects of its business process for all types of construction, the city decided to develop a phased approach towards restructuring their building department and applying information technology to several codes administration and enforcement processes.

The city started out by eliminating redundancies and required a higher level of accountability on both the permit applicants and city staff while guaranteeing a greater level of predictability in building department services. This included more uniform interpretation and application of the building code in both plan reviews and inspections.


Among the restructuring changes put in place by Salem, OR, were:


       Initiating a cultural change regarding the employee’s attitudes towards efficiency in delivering services and using information technology.

       Reviewing revenues, workloads, and staffing to match service levels with services paid for.

       Developing a guaranteed 10-day turnaround on plan reviews for single-family dwellings.

       Developing of a comprehensive phase permitting process for commercial projects that included all city departments.

       Amending the city ordinance to allow for “enhanced and expedited” services for an optional customized permitting process.

       Mapping out all their processes and examining all points of service delivery with the goal of predictable outcomes for customers.

       Creating an in-house I.T. position to work with staff and stakeholders to successfully gain funding for and successfully acquiring and applying information technology to selected codes administration and enforcement processes.


The net result of Salem’s efforts have been the attraction to the city of several new businesses and completion of construction projects ahead of schedule, a turnaround in the public’s and construction communities perspective to the city as a provider of quality services. The city also has built stakeholder support for adequate staffing and the acquisition of information technology for the building department.


In addition to drawing from all of the above business cases, the following matrix of costs, benefits, and savings is useful to a jurisdiction and clients in developing their own business case for streamlining using information technology.


H.   Building Your Own Business Case: A Matrix/Template to Document Costs, Benefits and Savings




Jurisdictions that have chosen to either develop or purchase information hardware and software to improve the effectiveness and efficiency of their building codes administration and enforcement programs have found it helpful to document the costs, benefits and savings that are incurred or achieved.


Compiling and then keeping track of such information enabled these jurisdictions to provide accurate update reports to stakeholders who supported the purchase and use of information technology and to adequately budget for future improvements in I.T. hardware and software use. These stakeholders include elected officials, the construction community, the city finance department, and the building codes administration program staff.


As noted earlier, in early 2005 the Alliance for Building Regulatory Reform in the Digital Age, with funding from the Institute for Building Technology and Safety, conducted a national survey of such costs, benefits and savings. There were 101 jurisdictions responding to that survey.

Based upon feedback from these jurisdictions, this report provides for other jurisdictions consideration and possible use the following “Cost, Benefit, Savings Matrix/Template.” Use of this template also will facilitate a jurisdiction’s making an assessment as to the costs, savings and benefits that may be achieved and is a useful communications tool with stakeholders.


The Cost, Benefit & Savings Template




Please check all that apply:


____ Permit applications and processing

____ Plan submittal, tracking and processing

____ Plan review

____ Licensing (please specify which licenses)

____ Inspection Scheduling

____ Conducting inspections

____ Other Administrative and Enforcement Functions (please specify)




(Complete for each software package acquired or developed)


A.    Investment - Software/Hardware Costs


1.     Total acquisition or production cost (include costs in developing and conducting RFP process) $ ___________________

2.     Costs of acquiring hardware to run software program $____________________

3.     Costs to interface with existing software programs in jurisdiction $ ___________

4.     Training Costs (employees and clients) $______________


B.    Long-term Operating Costs


1.     Maintenance Costs (hardware and software) $ _____________

2.     Costs of upgrades $_________________

3.     Ongoing Training costs (new employees or for upgrades) $ ___________




______ Improved jurisdictions relations with clients

______ Improved jurisdiction economic competitiveness with other jurisdictions

______ Enabled jurisdiction to offer a service that is now available 24/7/365

______ Enabled jurisdiction to share important data with other agencies enhancing the

governments’ effectiveness and efficiency

______ Enabled the jurisdiction to better plan for, respond to or recover from man-made or

natural disasters

______ The application of I.T. lead to better code compliance

______ Other benefits (please describe)




Note: Jurisdictions responding to the Alliance Survey in the spring of 2005 found it useful to measure amount of staff time it took to perform various codes administration and enforcement prior to the application of I.T. to their programs to enable them to then document savings that were subsequently achieved once the I.T. program was fully operational. Several jurisdictions also found it useful to document similar time and manpower savings that were being achieved by their clients as well.


A.    Prior Costs: How much time and how many staff were required to perform this function prior to the application of information technology to this process?


1.     Jurisdiction: Time to perform per item _________ Staff required to perform _____


2.     Customer/Client: Time to perform per item ______ Staff required to perform ______


B.    Costs After Putting I.T. in Place: Once the hardware and software were in place and fully operational and staff and clients had been trained in its use, how much time and how many staff were involved to perform this function?


1.     Jurisdiction: Time to perform per item _________ Staff required to perform ________


2.     Customer/Client: Time to perform per item _______ Staff required to perform _________


C.    Other Factors Impacting Costs/Time


1.   Was there an increase or decrease in construction volume between the prior application and post application period?


2.   If an increase, how much of an increase?


3.   If a decrease, how much of a decrease?


4.   Did the increase or decrease impact the manpower or time to perform this function?


D.    Other Savings


1.     Did application of I.T. lead to better code compliance? If so, please specify (e.g. reduced errors in plans submitted, reduced number of re-inspections, enhanced energy conservation in buildings constructed or renovated, etc.)


2.     Did application of I.T. contribute to new business coming to jurisdiction or deter an existing business from relocating?


NOTE: In addition to internally using the above matrix, the Alliance for Building Regulatory Reform would appreciate any jurisdictions that complete this form sharing their data with the Alliance so the information can be added to the results of the 2004-05 survey described earlier in this report.


I. Available Resources for Jurisdictions, Construction Industry and Elected Officials:

Costs, Savings and the Business Case for Streamlining


As noted throughout this report, the Alliance for Building Regulatory Reform in the Digital Age, through its Secretariat and partners, have developed a series of resources that are available to aid jurisdictions, construction industry and consumers in determining whether or not streamlining a community’s building regulatory process through the use of information technology will be of benefit to them.


This final section provides web access listings for these materials and other useful resources. The first three documents can be found on the NCSBCS website. – click on “technology” tab at top of home page, then “National Alliance”. These items can be found on the Alliance homepage.


  1. Listing of Software and Jurisdictions Using I.T.
  2. Model Procurement Requirements
  3. Interoperability Standards
  4. Guide to More Effective and Efficient Building Regulatory Processes Through Information Technology (This Guide is scheduled to be issued by HUD in the winter 2005-2006.)