The government approvals process, sometimes called the entitlement process, is a key step in a development project, and your team will need to obtain entitlements, permits, and zoning approvals from state or local agencies. Securing government approvals is vital to a project’s success, and developers must have all entitlements, including zoning, density, environmental, utility, and occupancy permits to begin building. Even though the process can be challenging, the right strategies and tools can help your team successfully navigate regulations and secure permits without derailing project timelines.
Here’s a closer look at the government approvals landscape, including everything your development team needs to know to ensure the project goes smoothly:
Understanding the Regulatory Landscape
Developers should familiarize themselves with the regulatory landscape, as the policies can impact nearly every stage of a project’s lifecycle, including feasibility, timelines, costs, and overall success. Navigating the acquisition of government approvals effectively can be the difference between overseeing a smooth development process and hitting costly delays.
The main types of entitlements developers should be familiar with include:
Zoning: Zoning determines the function of a property in a location by dividing land or locations into particular uses. If the land your project is on is zoned for a different use, you will need to undergo a rezoning process to change the purpose or use of a property. Conditional Use Permits (CUPs) are sometimes issued when a development is sanctioned under zoning laws but needs special approval. For example, a developer may try to construct a hotel in an area zoned for mixed-use properties. Zoning variances are also sometimes issued to allow developers to bypass certain land use restrictions, such as when a developer wants to build additional parking or increase building height over the zoned allowance.
Use: Use permits are granted as an exemption to use the land for a purpose not otherwise authorized in the zoning ordinance, and must be granted by a government board finding the project brings value to the community.
Design: Site Development Plan Approval is required on projects to ensure the project complies with local design standards, such as building placement, parking, and landscaping. Architectural Review Board (ARB) approval may also be required in some cities to ensure aesthetic consistency with the surrounding areas.
Utility & Infrastructure: If utilities such as electricity and plumbing aren’t already connected, you’ll need approval before adding them. You may also be required to conduct a Traffic and Transportation Impact Study to evaluate how the property will impact surrounding traffic patterns.
Environmental Approvals: Environmental Impact Assessments (EIAs) are increasingly being required for large projects to determine the impact of a building on the environment. EIA’s are required before construction begins and evaluate the direct and indirect impact of a project on biodiversity, human health, air quality, soil and other elements of the natural environment.
Building Permits: Building permits ensure compliance with building codes and authorize construction.
Community Approvals: Local planning boards have significant influence and often public hearings or community meetings are required to get a project off the ground. In addition, some local planning boards may insist on project agreements where developers create additional green space or other amenities for the broader community.
Policies around entitlements will vary between state and local governments and will be in the different stages of the development process. Early-stage research and a thorough due diligence process are necessary to ensure you secure permits as needed.
Key Steps in Securing Government Approvals
The entitlement process is made up of several key steps:
Pre-Development Research: Be sure to conduct feasibility studies and do thorough research into zoning laws, land use regulations, environmental policies, and any other relevant policies before moving forward with a project. Research ensures your proposed project aligns with existing regulations and helps prevent unexpected regulatory hurdles.
Stakeholder Engagement: Building positive relationships with government officials, city planners, and community groups will be a valuable asset as you move through the government approvals process. In addition, developers may include agreements with local boards to include infrastructure improvements or community spaces as part of a project.
Application Process: Developers submit detailed plans for projects, including project timelines, environmental impact studies, and other required documentation.
Review Process: The submitted application will be reviewed by agencies involved in the approval process, including local planning boards, environmental agencies, transportation authorities, or other stakeholders.
Negotiation and Adjustments: Throughout the reviews process, developers will be able to negotiate certain aspects of approvals with government agencies or with community members as necessary.
Fees and Permits: Developers pay fees to obtain permits after getting approval, and can then move forward with construction
Common Roadblocks and How to Overcome Them
The government approvals process can be intensive and complex, and several common obstacles arise for developers.
Shifting Regulations
Government policies are in constant flux, and new representatives, market conditions, and evolving urban planning goals can result in changes to state or local regulations. Researching policy dockets in early-project planning can help prevent any unexpected obstacles from derailing project timelines. You can also find ways to align your projects with broader community goals – for example, in neighborhoods looking to increase walkability, a transit-oriented development project can help a city become more pedestrian-oriented. Building strong stakeholder relationships with local planning boards and governments can also help in the case of a shifting regulatory environment.
Community Opposition
NIMBY-ism, or Not in My Backyard opposition, is a common obstacle in securing government approvals. Your development team can work with local officials and community housing advocates to overcome NIMBYism, facilitating conversations in a public forum to show how the project will benefit the neighborhood. Leaning on past case studies and offering tours of other affordable housing properties are two strategies your team can use to get the broader community on board.
Environmental Policy Shifts
Legislation to curb carbon emissions is becoming increasingly common, and aligning your projects with broader environmental goals is essential. Conducting a thorough EIA is the first step in meeting environmental goals. Government policies promoting sustainable development through tax breaks and other incentives can also help your team offset the cost of including environmentally friendly features in a project. Energy leases, where developers lease a portion of a property to a green energy provider, are another strategy your team can use to comply with sustainability requirements.
Cost Overruns Due to Project Delays
Outdated and error-prone spreadsheets have long been the go-to strategy for managing important documents on a development project. In order to prevent key documents and deadlines getting siloed and derailing your project’s timeline, your team should consider leveraging technology. Modern real estate development software can empower your team to automate document collection and management, meaning your team can spend less time on menial entry.
Leveraging Technology to Streamline the Process
Northspyre can replace spreadsheets and manual processes as you navigate the government approvals process, saving your team time and preventing costly errors. By centralizing the relevant documents necessary throughout the government approvals process instead of working across disparate systems, you can prevent errors that might derail your project timeline. You’ll also empower your team to move more quickly and efficiently, ensuring the approvals process doesn’t become lengthy and costly to your team.
Northspyre’s platform also allows you to define specific workflows for document approval, helping you align stakeholders and ensure documents are accurate before they are submitted to a government agency. You’ll also be able to keep all relevant users up-to-date on where the project is in the regulatory approvals process with real-time dashboards and analytics. Government approvals is a complex, intensive process, and by using modern technology, your team can set a project up for success as early as pre-development.
Read our ebook on Maximizing Public-Private Partnerships to learn more about how building stakeholder relationships can benefit your CRE portfolio overall.
