The Permitting Purgatory
Unleashing American Productivity: The Urgent Need for Permitting Reform
Time for a topic I’ve spent a ton of time on over the last 18 months building Base Power. Permitting!
Once hailed as the leader in innovation, the U.S. now lags behind on the world stage in delivering large-scale projects. We're stuck, not for lack of resources or engineering skillset, but largely because of a permitting process that's become an immovable object, crushing innovation and progress under a mountain of red tape. Reform of permitting is needed at both the federal and, more importantly, the state and local levels to enable the rebuilding and expansion of America’s infrastructure.
The recent and tragic Los Angeles fires brought permitting to the forefront as a national issue, with the notoriously-terrible Los Angeles Department of Building Safety estimated to take years to act on permits for residents to rebuild.
Permitting Evolution
Over the last 70 years, the landscape of infrastructure development in America has transformed significantly. Post-World War II, the U.S. embarked on monumental projects like the Interstate Highway System, which was completed in a span that seems almost miraculous today. Initiated in 1956 under President Eisenhower, the system was envisioned as a network spanning 41,000 miles, fundamentally altering American mobility and domestic trade. By the 1970s, it was largely complete, a testament to a time when federal oversight was streamlined, and the focus was on doing rather than debating.
This has resulted in significant delays for even basic infrastructure to be built. The time to build critical electrical infrastructure follows a similar pattern. Below is data from the US government.
For the constructed items, what do you notice about the relative size of the bars? Permitting takes longer than construction.
China’s Approach
While America struggles with red tape, China has bypassed much of the permitting overhead that plagues Western countries. China built the world’s longest high-speed rail network in just a decade, with over 20,000 miles of track. In contrast, the California high speed rail project has not delivered a single mile of usable infrastructure over its 15+ year history.
China’s approach is not without its problems, of course. Construction of certain sections has led to significant environmental degradation and human rights issues. However, when it comes to infrastructure development, the Chinese system is remarkably efficient. America, and Texas in particular, could learn from this approach, not in terms of ignoring regulations, but in terms of streamlining the process to make it more efficient.
The US stagnated on railway infrastructure for decades while China has lapped us multiple times
CA’s high speed rail project is the quintessential example of sclerotic bureaucracy preventing real development in the United States.
The Dichotomy in Texas
Here in Texas, as it relates to the ability to build infrastructure, it's a bit of the haves and have-nots. Interestingly, the permitting process for certain building types varies significantly by region. Also known as AHJ areas (Authorities Having Jurisdiction), the majority of the residential home construction and/or renovation process does not require permitting or inspections when outside of city limits and in ‘unincorporated’ areas. As such, the exact same house might take 25%+ longer to build than its neighbor down the street.
Shaded areas are city jurisdiction, unshaded are county. Building anything in the shaded areas is meaningfully more expensive and time consuming than unshaded, and highly varied from city to city. As such, much of the new home building in Texas is outside of city limits.
Permits and inspections themselves aren’t actually the problem here though - it's really how they are implemented. My company installs backup batteries on homes throughout Texas. As such, we’re exposed to tons of cities’ processes. They range from $45 auto-issued digital permits with photo-based inspections to in-person-submitted $992 permits with 12-week lead times and multiple in-person inspections. Practicality-focused city leaders and managers in Texas can and sometimes do make the process simple and effective while protecting citizen’s safety.
The login screen for the City of Dallas’ permit submission website as of February 2025. You read that right: the website’s copyright is 19 years old, and is shut down daily.
The Solutions Aren’t All That Complicated
A holistic solution to the problem in Texas and elsewhere can’t involve cities alone - there are too many, they are too understaffed, and have too small of budgets to address the issue in a meaningful way. Instead, we should implement a series of reforms at the state and federal levels focused on streamlining the permitting process, reducing red tape, and ensuring that regulations are applied consistently across the board. Here are some specific solutions:
State and Federal Regulation on Permits
One of the biggest problems with the permitting process is the lack of consistency between different jurisdictions. This does not mean that all localities should be forced to adopt identical regulations, but rather that there should be a baseline set of standards that all jurisdictions must follow. This would reduce the burden on developers who have to navigate different regulations in different areas and would ensure that permits are issued in a timely and efficient manner.
Time and Cost Limits
Set time and cost limits for common building types, such as residential projects. For example, the state could establish a maximum time limit for issuing permits for single-family homes, with penalties for jurisdictions that exceed this limit. Real accountability to this metric with publicly-facing data shared with constituents would help to enforce governmental performance.
Building Standards
Most cities adopt building standard codes, such as the National Electric Code as a basis for their permitting and inspection technical checks. Often, these documents are riddled with outdated standards that do not take into account modern equipment and materials. By rewriting these codes to be based on physics-based principles, we can ensure that buildings are safer, more efficient, and more cost-effective.
Digitize The Process
State mandates could drive the adoption of digital permitting platforms to streamline application submissions, tracking, and approvals. Furthermore, the basic use of automated systems to flag errors and inconsistencies would significantly reduce manual review times and associated costs. Federal programs such as SolarApp+ can be utilized everywhere.
Privatization
Some states have adopted third party permit review and inspection laws, allowing the free market to compete for the most effective and efficient permitting process. More states should adopt laws like Texas’s HB14.
Conclusion
The call for permitting reform isn't about deregulation for its own sake; it's about recalibrating our approach to align with the needs of a modern, dynamic society. Through reform, America can reclaim its role as an infrastructure innovator. To catch back up with near-peer competitors like China, we’ll need to cut through the red tape and unleash American productivity.