Best Practice Category:
A variety of municipal incentives can reduce the time, cost, and uncertainty of the approval and permitting process for desired developments within transit-adjacent neighborhoods. Lengthy approval processes are frequently a strong disincentive for investment in urban projects, as the extended timeframe increases project cost and creates uncertainty about when the project will receive municipal approval. A prolonged period between project conception and delivery can also result in the project being delivered during a real estate downturn. For developers who have successfully received financing for a project, unforeseen delays can be costly as the developer is responsible for carrying costs including interest payments. In areas with weaker market fundamentals, municipal approval policies and permitting fees can tilt the balance away from new investment.
Fast track permitting and fee waivers can be used to incentivize transit supportive development by reducing the time, cost, and uncertainty of the approval and permitting process. Key hallmarks of many fast track programs include: guaranteed approval timeline, creating a one-stop multi-agency review committee, dedicating a single point of contact through the permitting process, waiving overtime charges for weekend inspections, and reduced approval steps. In order to incentivize transit-supportive development, these benefits could be applied to all developments within a specified transit region or proximity to stations or stops.
Fee waivers or reductions are a simple incentive to reduce project costs for desired projects. In markets where the economic viability of a proposed project is marginal, development fee waivers can be one tool to close the feasibility gap. As with fast track permitting, fee waivers are often targeted towards specific projects or neighborhoods that support achieving broader policy goals.
- Decreased uncertainty for developers of target projects
- Closes feasibility gap for projects in areas with reduced market support
- Allows city to more effectively differentiate projects that serve transit and affordable housing goals
The Riverside County Economic Development Agency has been aggressive in developing alternative ways to incentivize business investment in its communities. The agency has developed a comprehensive streamlined land-use approvals and permit process that supports target investments. The county’s fast track status allows for select projects to go to hearing in as few as 60 days and for building plans to be checked in as few as 14 days. Throughout the process, project sponsors are guided by agency representatives. As with many municipalities, the agency uses the fast track program to prioritize desired projects. Eligible projects are restricted to those that create at least 40 permanent jobs, invest at least $5 million in land, buildings or equipment, or produce $12.5 million in taxable annual sales. The fast track program has been successful in attracting investment to the county and national firms such as Anheuser-Busch and Nestle Food Company have benefited from the program.
The Riverside County Economic Development Agency has also embraced other methods of incentivizing development within the county. In 2015, the agency opened The Riverside County Business Center. The center serves as a one-stop-shop for businesses interested in building within Riverside County. The center is equipped to help interested parties with property selection, financing information, fast track processing, incentive zone information, workforce development, and more.