Avoiding Fraud, Waste, Abuse & Missed Revenue in Building Permits

building permit software illustration

Accessory dwelling units have been in California for decades. But because they weren’t legal until recently, they were often done off-the-books. “I believe that there are now 200,000 unpermitted ADUs in California,” state Sen. Bob Wieckowski (D - Fremont) told The Planning Report in 2018.

As everyone involved in the permitting process knows, t’s not just ADUs. It can be surprising how common unpermitted work is, and new homeowners often get a big surprise when they learn that additions, bathrooms to electrical upgrades aren't up to code. Unpermitted construction is a big headache for government, resulting in substandard work, safety hazards, inaccurate property tax assessments, and a lot of missed revenue.

Thankfully, easy-to-use building permit software from partners like ClearForms can help governments combat fraud and missed revenue while boosting compliance with building permitting requirements.

How Permit Avoidance Happens

Governmental agencies in the United States were issuing about 1.7 million building permits annually as of May 2021, with numbers as high as 2.4 million in the early 2000s. Despite these high numbers, unpermitted work is common, with one Denver-area real estate agent estimating it could involve as 40% to 50% of houses. With building permits costing an average of $1,340, according to HomeAdvisor, this could mean as much as $2.278 billion in lost revenue annually.

Permit avoidance is common and can happen in various ways. Some property owners or contractors try to get work done as cheaply as possible and forgo the few hundred or thousand dollars a permit might cost. Permitted work can also lead to property tax increases. Some contractors just don't want to spend the time it takes to get approvals, especially in places where they must spend hours going back and forth to the counter.

Many well-meaning people, though, might not know which types of work require permits. Others might feel stress or confusion about having to go in-person to a permit counter. People wind up avoiding permits, whether due to ignorance, discomfort, or something else. ClearForms' technology helps reduce much of the friction that causes permit avoidance.

Avoiding bribery and graft: 

Unfortunately, there's a long history of a few unethical planning and building staffers giving the field a bad reputation. While bribery and "under the table" payments to staffers do happen, they're much less likely to go undetected when a modern, transparent software system allows senior managers and the public the ability to track the permitting process from start to finish. Of course, no technology can completely eliminate humanity's creativity when it comes to graft, but shifting permit and inspection fees to online payments is one way to create more oversight and reduce the temptation for people to try and game the system.

How ClearForms Uses Technology to Boost Permit Compliance:

ClearForms can help your municipality or county immediately boost compliance rates for building permits.

Typically, when a government switches from a paper- or PDF-based "over the counter" permitting system, filings increase by up to 25%, simply by making the application process available 24/7 and accessible from a smartphone.

Currently based in Erie, Pennsylvania, ClearForms began developing its workflow software for a business licensing use case for the transportation department of the City of Santa Monica. The company quickly expanded its focus to all types of permitting, licensing, and government processes when company leadership realized that creating better technology for local government staffers could meaningfully improve people’s lives and help governments streamline housing construction and permitting. Co-founder Catherine Geanuracos told Government Technology in 2019.

“We’re trying to make this accessible to a much broader range of governments than have been able to use some of our competitors,” Geanuracos said. “We automate a lot of the things that are easy to automate for people, we’ve reduced the administrative time it takes for people to move permits through the process … so they’re able to do more with the same or less effort, and provide better service.”

ClearForms’ permitting software is sophisticated in design but easy to use for the public and government workers alike. The software can be used with any existing government website and is available on a sliding scale subscription fee, making it an accessible option for small and medium-sized governments. ClearForms also charges a small processing fee as a percentage of permit and license fees, which governments pass on to applicants.

The Bottom Line

Give people a way they’re comfortable with to apply for permits and they’re more likely to do it. Unpermitted work has been a problem for many years in the United States. But with the help of partners like ClearForms, governments can enjoy a new era of compliance.

Flexible building permit software that helps governments receive more revenue and greater compliance. Try CityGrows today.

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