With the downturn in the housing markets starting in 2008, all 38 building department in Palm Beach County had to some level difficulty with budgeting which led to a combination of cut industry and real estate developers have been targeting West Palm Beach. This increase in backs in staffing, reduction in cash reserves and the raising of building permit fees. Under the leadership of Mayor Jeri Muoio, Director of Economic Development Chris Roog, Development Services Director Rick Greene and Building Official Robert Brown, West Palm Beach has been steadily changing into a pro-growth builder friendly municipality. With over a dozen new large projects announced this year, the construction volume has resulted in significant improvement in West Palm Beach’s Building Services Department budget and operating reserves. The City of West Palm Beach currently has over 1 billion dollars of construction valuation either in active construction or in backlog (process of being approved by not yet started).
The fiscal year 2003-2004 was a peak year in construction in West Palm Beach with a significant number of high rise condominiums under construction. The City had over $735,000,000 of construction generated from over 25,000 building permits. The down turn hit West Palm Beach hard with the worst fiscal year being 2009-2010 were construction activity dropped to only $100,000,000 generated from only 7,157 permits. Unable to fund its building department adequately it laid off employees and develop a furlough employee program. Eventually the City commission had to raise building permit fees however, they raised them in a many that would facilitate a reduction when construction volumes increased. The City adopted in 2009 a resolution with two permit fees calculations structures. A higher fee structure based on lower permit activity (under $250,000,000 of construction valuation for the permits for fiscal period) to enable the City to survive the economic slowdown and a lower fee structure that would automatically kick in when permit volume reached a specific level. On June 24, 2014 West Palm Beach shifted to the lower fee structure based on the volume of activity. The net effect is that a typical $300,000 home’s building permit fee would have been under the old fee structure $6,510 dropped to $5,298 under the new fee structure representing a 19% reduction.
West Palm Beach is the first municipality in Palm Beach County to lower rates since the construction industry rebound that started in 2013 and has continued into 2014. How does West Palm Beach compare to the other municipality in building department fees? The rates vary dramatically but West Palm Beach is definitely looking better after its reduction. Below is a sampling of the municipalities that have the most permit activity in Palm Beach County in order of highest to lowest fee:
Estimated Permit fee on a $300,000 valuation new single family home:
Town of Palm Beach $8,221
Boca Raton $7,050
Boynton Beach $6,900
Delray Beach $6,628
Old City of West Palm Beach Rate$6,510
New City of West Palm Beach Rate$5,298
Palm Beach Gardens $3,895
Un-Incorporated Palm Beach County $3,850
City of Wellington $3,535
With the increase in construction volume, all building departments in Palm Beach County will be faced with issues of how to service the volume increase. It is likely that Building Officials will be focused on hiring and training new employees, funding long deferred technology update projects and rebuilding reserves. While the building industry fully supports a high level of service from Building Departments, as construction volumes increase it will be important for the building industry to meet with building officials to evaluate if the cost of building permits can be reduced.
The City of West Palm Beach Building Department budget with the lower permit fees will still generate a significant surplus. The current plan for the surplus is focused on servicing the anticipated higher volume of construction activity. The City is preparing to high and additional 17 people in the Building Services Department preform a major technology upgrade to paperless building plan applications, acquisition of the vehicles and equipment to accommodate the new employees and rebuild their depleted operating reserves. They currently have no plans on increasing or further decreasing building permit fees.