Leveraging Technology to Support Construction Regulation and Permitting Reform : Insights from Recent Country Experience

Abstract

Good regulations, combined with sound enforcement mechanisms and an efficient, transparent, and affordable permitting process, can ensure safety standards for the community, facilitate investment in new building stock, and contribute to capital formation. A recent study shows that long delays in obtaining permits can lead to higher transaction costs and fewer transactions. Similarly, an earlier study in the United States (US) found that accelerating permit approvals by 3 months in a 22-month project cycle could increase construction spending and property tax revenue. Unpredictable, lengthy, and expensive permitting procedures influence entrepreneurs' decision making. A recent competitiveness report on the US, for example, found that construction costs and the permitting process were among the top 20 factors in determining the location of a start-up. Given the relevance of this area for both communities and investors, governments have sought to leverage technology to enhance permitting service delivery and improve availability of zoning requirements and building regulatory information.