Technology Companies Streamline Permitting
Process
January 25, 2001
By Eric Blum
Information technology is providing new tools
to ease one of the building industry's more pervasive annoyances:
permitting. More than a dozen companies are racing to get permit
seekers out of line by allowing them to file online.
"Pulling permits is the most fundamental pain
in the ass in the construction industry," says one dot-com executive.
The
new Web permitting companies are soothing this pain today, and
many of the companies are adding more ambitious interactive services
for the filing of new construction plans, which will fundamentally
improve engineering and architectural plan review.
These new services make use of Internet technology
and proven Web-based applications. For reconstruction, filing "over
the counter" typically requires an applicant to drive to city hall,
obtain and fill out a form, wait for verification that it was completed
correctly and, finally, pay a fee all to be handed a blank permit.
Inspectors sign off on the permit when the work is done.
Under the online system, the applicant logs
on to a Web site, accesses and fills out the appropriate form, pays
for it with a credit card, prints out the final document and goes
to work. A key to the Web-based services is ease of use. A potential
user who has the ability to access this story on construction.com
has all the skills needed to successfully use online permitting.
The benefits of the new system are speed and
convenience. The online permit counter is accessible 24 hours a
day, seven days a week, with no waiting. There is no need for the
trip to city hall, reducing traffic and pollution and preserving
prime work hours for work. Governments have the opportunity to streamline
their permitting operations and enter the world of e-government
at little or no cost.
"The old way [of filing for permits] was very
tedious, very time consuming and very inefficient," says Chris Guslani
of Hot Water Inc., San Francisco, a company that provides plumbing
services to Sears, Home Depot and others. Guslani says his company
started using online permitting last November. Hot Water Inc. uses
NetClerk's Permit Central and pays a monthly fee for the service.
Today most jurisdictions in the Bay Area accept automated applications,
he says.
"Now I can permit 15 to 20 jobs in 40 or 45
minutes," Guslani says. "Before I'd be lucky to get one permit in
45 minutes."
The San Francisco area got a jump-start in
this arena through the work of Smart Permit, a project of Joint
Venture: Silicon Valley Network, which served as an incubator for
technological innovation in the Bay Area.
Contractors typically pay for the convenience
of online filing. The time savings make the economics work, Guslani
says. Automated permitting usually is free to governments although
some subsidize the service, such as Miami-Dade County in Florida.
In most cities, online permitting is in planning
or is very new. In Alameda, Calif. the automated permitting system
kicked off last fall and successfully processed its first two automated
permits that week. Greg McFann, the building official for the city
of Alameda, says that their system is part of the city council's
effort to improve customer service through comprehensive e-government.
"Our system not only allows for permit filing,
it allows for scheduling inspections and it allows homeowners to
check the status of the work," McFann says. Alameda uses Accela's
VelocityHall, although it would be willing to work with any company
that is able to tie into the city's database, McFann says.
"We're very happy so far," McFann says, adding
the city hopes to incorporate the ability to automate more complex
plan-type applications. "This is our first entry. We plan to work
our way up."
The dot-com companies rolling out these services
are racing to enlist as many jurisdictions and permit filers as
possible to establish leadership in the market. Many of these companies
are spin-off activities of long-time providers of software solutions
for government, so they already have a relationship with the jurisdiction
and extensive knowledge of how to make the connection between the
contractor and the government's employees and back-office computer
networks.
Some firms are proceeding without officially
partnering with jurisdictions, choosing to automate the permit application
process and then deliver the completed permit in any manner the
jurisdiction prefers. This allows for a faster geographical rollout,
but lessens the immediate interactivity of the service.
Most of these firms have tested and started
marketing their permitting products within the last year, so it
is too early to speculate on future market share or profitability.
Leaders of these online permitting companies admit that it is unlikely
that all firms will succeed long-term, especially given the increased
pressure of the recent dot-com shakeout. The future may well include
consolidations, partnering and, for those that dawdle, failure.
VelocityHall-Partnering with
Government
South San Francisco-based Accela last summer
introduced VelocityHall as its online permitting product. VelocityHall
is a Web-based service that connects directly and deeply into local
government's back office computer systems, enabling the complete
range of simple and complex permit administration.
Accela's online permitting extends from an
established base of jurisdictions for which it provides computerization
over the past 20 years. The company was recreated in 1999 through
the merger of Sierra Computer Systems Inc., OpenData Systems Inc.
and Accela Corp. The new firm specializes in the sale of e-government
interactive capabilities.
Approximately 120 of the 300 Accela-served
localities have adopted VelocityHall, and Maury Blackman, vice president
of corporate development for Accela, says that number is increasing
rapidly. The product began operating on a test basis in fast-growing
San Bernardino, Calif., in June.
Blackman says the key to success in the reconstruction
arena is simplicity of use. A user can log on to VelocityHall directly
through a jurisdiction's Web site and VelocityHall will mimic the
look and operating style of the government site.
For a simple permit, the applicant
logs on and then follows a seven-step process:
- Zero in on the correct address by filling in city and
street name information. The site presents all possible addresses
and the applicant clicks on the correct work location;
- Agree to the government's legal declaration associated
with online application;
- Fill out contractor information, including license number;
- List work tasks to be undertaken consistent with
the business license;
- Review project fee calculation which shows the government's
permit fee and adds 10% plus $5 for VelocityHall;
- Pay all fees with credit card;
- Print out permit and go to work.
For new construction plans, which Blackman
calls "the Holy Grail" of online permitting, the process is similar
but provides greater opportunity for concurrent interaction between
applicants and overseers.
Traditionally contractors deliver a bundle
of drawings and plan documents to city hall where they maneuver
from desk to desk, traveling through the planning and inspection
offices until the packages mysteriously and unpredictably emerge
on the other end. If changes are required, the package is returned
to the applicant, updated, brought back to the reviews, where the
process starts again.
With online filing, contractors upload CAD
drawings and plans that are accessible to all planners and inspectors
simultaneously. Each overseer may approve or withhold approval of
their piece, and may attach comments. E-mail is automatically generated
to inform the applicant that the status of the submission has changed.
The applicant may make changes to the drawings or plans and resubmit
them immediately online. The applicant can track all approvals as
they are made over the Web.
"This greatly accelerates the approval process,
which therefore accelerates the building process," Blackman says.
"Our experience has shown that an approval process that used to
take as much as six to eight weeks can now be performed in six to
eight days."
These interactive relationships between government
and constituents also enable people to pay traffic tickets and tax
bills, apply for motor vehicle services and register to vote. It
creates what is considered a government-to-business (G2B) or government-to-citizen
(G2C) virtual relationship. Companies with a history of providing
computerization to government have spun off into this sector and
are providing online permitting services.
A Different Approach
Some companies are straying from first establishing
a working relationship with the jurisdiction's computer system.
These firms are driving automated permitting from the contractor
to government rather than from government to contractors. This becomes
a business-to-business-to-government (B2B2G) model rather than the
more traditional G2B model.
NetClerk is an aggressive proponent
of this contractor-oriented model. "We don't care how a city operates
its permit review department," says NetClerk CEO Jeff Kraatz. "We
will adapt to however they operate."
Their "agnostic" approach, he says, will speed
widespread adoption of automated permitting. NetClerk now claims
to be operating in 1,350 jurisdictions with a target soon of 2,500.
Most recent areas to be served are Dallas and Minnesota's Twin Cities.
Providing service to a large metropolitan area can require bringing
on line 50 or more jurisdictions.
For NetClerk to enter a new community requires
little if any contact with the local government. The company merely
posts this jurisdiction's permitting forms to its site and transmits
completed forms in the manner the government is most comfortable
with, typically e-mail, fax or hand delivery. "We have an entire
government relations department of five people who do nothing but
proactively interface with cities to ensure accurate processes are
developed between our two firms, compliance issues are met, and
continual process improvement can occur," says Kraatz.
Some jurisdictions have refused to electronically
process these permits, but most welcome the assistance that is free
to the governments. Recently San Francisco Mayor Willie L. Brown
commemorated the processing of 1,000 permits through NetClerk. "That's
1,000 times that a contractor didn't have to mess with traffic,
parking and a line to wait in," Brown said in a statement.
NetClerk makes its money by charging contractors
a monthly fee ranging from $100 to $2,000 per month, depending on
usage. The company claims Home Deport contractors, Roto Rooter plumbers
and Lenox heating as customers.
Kraatz says he expects this new offering to
continue to provide significant growth, change and innovative partnerships.
In mid-January the company announced the acquisition of $6.5 million
in new venture funding.
Permits.com, New York City, uses a
similar model and envisions a similar national presence. Currently
its product mainly is in use in the Northeast and also Chicago,
St. Louis, Dallas, Houston and throughout Florida, according to
Saul Leopold, CEO.
Charles Rizzo & Associates, a zoning law
consulting firm, originated the company. Permits.com promotes itself
as having an understanding of the needs of permit filers and special
insight into the desires of local governments. "It is important
that we enter into cooperative relationship with government," says
Stephen Rizzo. "We'd rather have great service in 1,000 cities than
mediocre service in 2,000."
The company currently is taking part in a
demonstration project in which a home is being built in Las Vegas
using Web-based tools for design, permitting, procurement and project
management. The Dot-Com Dream Home is billed as the first of its
kind and is being permitted through Permits.com and Clark County
government. An upcoming series of Home Again with Bob Villa will
explore the on-line experiences. The project can be seen at www.dotcomdreamhome.com.
PermitsNow.com, Rockville, Md., provides
online permitting and other services mainly on the East Coast. Last
August, it received a new round of investment funding that will
help it expand nationally. Immediate targets are Atlanta, Dallas,
Phoenix and Orange County, Calif.
The firm has 20 years of experience in computerization
and facilitates online permitting through both G2B and B2B2G models.
It charges customers $16.95 per month plus $10 per transaction.
The company's first big splash is the completion
of full coverage of the Baltimore-Washington D.C.-Richmond, Va.,
area, more than 50 jurisdictions including all 24 in Maryland.
According to CEO John Webster, PermitsNow.com
promotes a close relationship with the local governments through
a three-step process that examines current permitting and public
works practices, installs the electronic permitting desk and finally
provides complete integration with back office computerization to
facilitate innovations such as plan review or wireless connection.
Along with companies with national aspirations,
many more local and regional firms are moving their permit services
to the Web. Ultimately, building contractors and designers in jurisdictions
offering the new services will find a more pleasant, efficient and
cost-effective process.
Roster of Online Permitting Companies
Inc.
South San Francisco, Calif.
www.accela.com
VelocityHall Web-based software connecting to 120 jurisdictions for
both simple permitting and complex plans administration.
CRW Associates
San Diego, Calif.
www.crwassoc.com
Permit Trak, part of Trak It suite In 10 years of operating, has
provided full-function software for government in 50 jurisdictions.
CSDC Systems Inc.
Ontario, Canada and St. Louis, Mo.
www.csdcsystems.com
AMANDA Automates all functions within local government building
departments in Canada and the U.S.
EZGov.com
Atlanta, Ga.
www.EZGov.com
EZGov LocalSuite E-government provider specializing in facilitating
citizen business with government on line. In partnership with IBM.
GovHost.com
Columbia, S.C.
www.govhost.com
GovHost Suite Provides full networking and Web access to local government,
mostly throughout the Southeast.
National Information Consortium (NIC)
Overland Park, Kans.
www.nicusa.com
NIC Permit Solutions Provides e-government solutions especially
for state government. Handles 12 state's web portals. Partners with
Tidemark.
NetClerk.com
South San Francisco, Calif.
www.netclerk.com
CityCentral Promotes online services for construction contractors.
Says it is expanding nationally, and currently is in more than 1,000
locales.
Permits.com
New York City
www.permits.com
Permits.com Promotes service as complete form management for the
construction industry. Now expanding from it Northeast base.
PermitsNow.com
Rockville, Md.
www.permitsnow.com
Permits Now Provides permit automation in the Baltimore-Washington
D.C. metro area and throughout the Southeast. Funded for nationwide
expansion.
[PermitsNow Closes May 1, 2001]
Permit Place
Tacoma, Wash.
www.permitplace.com
Provides permitting interface with jurisdiction mainly in upper
Northwest.
Tidemark Solutions
Seattle, Wash.
www.tidemark.com
Tidemark e-Connect Internet-based solution for government interaction
with citizens and businesses. Sixteen years in business, active
in partnerships including NIC.
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