All remodelers are robbery victims. The thief is slippage, which is the amount your profit falls short of plan. The root causes of slippage are often simple — but that doesn't mean they're easy to find. And while some sources, like inconsistent labor productivity or poor change order management, can take big bites out of profits, smaller losses tied to less obvious sources can add up.
One of the places slippage goes unnoticed is in the uncaptured cost of securing permits. Most estimates include a line item to cover the hard cost of the building department fee, but few remodelers fully account for soft costs of obtaining building permits. That includes time spent in the office getting the paperwork ready and the hours spent traveling and waiting at the building department.
How bad can it get? Just ask Peter Pagenstecher, partner with architect Dean Brenneman in Brenneman & Pagenstecher, a design/build firm in Kensington, Md. The building department in Montgomery county, where most of the company's work takes place, is pretty efficient, so Pagenstecher and his staff handle the process themselves, billing customers by the hour. But some of his work requires permits from the District of Columbia, where, as with many urban areas, the process is an extreme example of a bureaucracy out of control. “We didn't seem to get anywhere unless we knew somebody in the office,” Pagenstecher says. “We were spending more and more time, and we couldn't just send anybody. It had to be somebody who could answer their questions.”
That somebody turned out to be Christy Whalen, who has made it her business to escort projects through the permitting process. She started her company, Interior Solutions, after living through the frustration first hand while working for a local contractor. She and one employee focus mostly on residential new construction and remodeling, working not only with contractors, but also engineers, bankers, and, of course, homeowners.
For most projects, Whalen charges $250 for the first 5 hours, and $35 per hour after that. Even when multiple visits to the building department are required, the $250 fee is usually enough because, as Whalen explains, “We're down there every day. If you're just doing one permit, you'd have to come back, find parking, and get back in line.”
Whalen's 17 years of experience is a big part of why her service is so valuable. “Time-wise, she can get the permit faster than we ever could,” Pagenstecher says. “And the fee is a lot less than it would cost us to drive down there, wait around, and drive back.” Whalen also looks at the permit packages and points out missing information that might hold up the process. And she's tenacious. “She'll stand in someone's office until she gets the permit,” says Pagenstecher, who has also known Whalen to correct the permit board when they've made a mistake. “She knows all the ins and outs,” he says. “She's down there every day, everybody knows her, and she can get it done.” The bottom line for Pagenstecher is that, when it comes to filing for a permit in D.C., hiring a third party is the most cost-efficient solution. “For us it boils down to doing what we are good at, which is designing and building. We're not good at dealing with bureaucracies.”
Permit Pointers Remodeler Paul Eldrenkamp, owner of Byggmeister Associates in Newton, Mass., doesn't worry much about permit costs. That's partly because he builds in a one-hour labor charge for every $20,000 of project cost. It helps to have a cooperative building department, but he has also taken a few simple steps to make the permitting process more efficient:
Don't reinvent the wheel. Keep a file of requirements for each municipality in which you work so you don't have to look them up from scratch each time.
Double-check everything. Missing information virtually guarantees a return trip downtown. It's easier — and cheaper — to get it right the first time.
Build relationships. Things happen faster and with less hassle when you get to know the people in the building department personally.