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Development Permit Processing and Post-Approval Considerations in the Wake of COVID-19

For the development community, the disruptions caused by the pandemic will add more uncertainty to an already uncertain entitlement landscape.

As developers evaluate their individual situations during this difficult time, it would be prudent to look ahead and analyze how processing delays, as well as disruptions in project financing, may affect the status of existing or pending entitlements, permits and applications. Project approvals and permits also do not last forever. For those who obtained an approval within the last year or two, this would be a good time to review your permit to ensure that it does not expire soon and to take efforts to seek an extension, if necessary. 

There is no question that local governments will be forced to adjust their budgets and priorities to manage both the economic impacts of the crisis and the need for much-needed emergency relief measures. Local jurisdictions depend on sales taxes from now-closed restaurants and retail stores, transient occupancy tax, and other sources of revenue, and while it is premature to forecast the severity of the impact, it seems likely that governments will have fewer resources available. This will likely mean that community development and planning departments, which were already facing criticism due to lengthy and complex entitlement processes, may be even less capable of efficiently approving much-needed housing and commercial development that will be a critical part of the economic recovery effort. In the interim, there are also simple logistical barriers that staff must overcome as cities transition to working remotely, and thus ordinary aspects of the entitlement process – from meeting with applicants to review plans, to community outreach meetings – simply cannot occur under the current circumstances. Nor, of course, can most construction commence with the exception of residential and public works projects.

As a consequence, developers will continue to experience delays in the administrative, behind-the-scenes work led by planners, who are adjusting to working from home and are no longer able to interact directly with applicants, as well as in the actual approval process. While some jurisdictions are switching to remote public meetings (in accordance with Executive Order N-29-20), others have altogether cancelled regular City Council, Planning Commission, and Development Review Committee meetings through early April, with stay-at-home orders recently extended through the end of April and uncertainty as to further extensions beyond May 1st.

With respect to permit expiration deadlines, it is premature to speculate whether legislative or other action will be taken to retroactively extend permits that may expire, but now would be an opportune time for developers to review the status of their entitlements or permits to confirm their rights and consider what can be done to preserve them once local government operations return to normal.

Typical Entitlement Expiration Periods for Common Approvals

Discretionary and ministerial land use approvals are generally valid from one to three years, excluding extensions. Permittees are required to complete certain activities (e.g., obtain a building permit or commence construction) prior to the expiration date or obtain an extension, if possible. Failure to do so and allowing approvals to lapse means that developers will have to start the application process all over again. In addition to delays, considerable uncertainty is created: the project may need to be reviewed under zoning codes and other rules that may have changed since the initial approval, and the membership and political priorities of the decision-making body may have changed as well, making re-approval difficult or impossible.

The ability to obtain an extension for a discretionary approval (e.g., a conditional use permit), the length of the extension, and the standards for approving an extension vary by jurisdiction. For example, in the San Francisco Bay Area, conditional development permits issued by the City of Menlo Park are valid for a minimum of one year and may be extended for another year administratively if staff finds there is good cause for the extension based upon unusual circumstances or conditions that were not created by the applicant. Discretionary permits in the City of Sunnyvale, on the other hand, are valid for two years and may be extended by staff for an additional year. In San Francisco, decisions to revoke when an approval deadline is not met or to extend many major project approvals typically are the responsibility of the Planning Commission, although revocation of entitlements for failure to meet the various deadlines is relatively rare.

Building permits generally require the applicant to commence work within one year of approval and may be extended for another 180 days. There are exceptions, however, so it is important to confirm the requirement for each jurisdiction. San Diego County, for example, requires that all work must be completed within three years and the permit expires if the work does not commence within two years. In San Francisco, deadlines for large projects are much longer and extensions are readily granted.

With respect to subdivisions, tentative maps are valid for two to three years depending on the jurisdiction. Extensions may be granted, often requiring action by elected officials.

If You Need to Request an Extension, Don’t Delay! 

In light of the difficulties that jurisdictions may experience in the coming weeks and months, now would be a good time to review the expiration date of all active discretionary and ministerial approvals. If the approval or permit will expire within the next few months, we recommend requesting an extension as soon as possible. Try to be patient and expect processing delays, but follow up occasionally to ensure staff is processing the request. Further, confirm with staff whether the extension requires action by a planning commission or city council and, if so, options for hearing dates given that many cities have or will cancel regular meetings. Even after city operations resume, there will likely be ongoing delays.

Keep an Eye Out for Legislative Relief 

There is a possibility that the State and local governments will provide legislative relief if the economic situation deteriorates and developers are unable to move forward with their projects. In response to the Great Recession, for example, the State Legislature approved multiple laws to extend the life of tentative subdivision maps, so there is precedent for such a response after a crisis. Momentum already seems to be building for legislative action. The American Planning Association, California Chapter, recently sent a letter to Governor Newsom in support of requests from the League of California Cities and the California State Association of Counties to pause statutory requirements related to the review and approval of development projects, Housing Elements, Housing and Community Development grant programs, Public Records Act, solar permits, and wireless telecommunications facilities. The APA also requested a 120-day extension of the SB 35 deadlines (90 days for projects with 150 or fewer units and 180 days for projects with more than 150 units, per Government Code Section 65913.4) for final action by local governments.

As an alternative to State action, local governments have the ability to similarly modify their ordinances or adopt resolutions to grant blanket extensions of various approvals. That said, it will likely take time before measures like these are considered and enacted. In the meantime, some local jurisdictions may provide temporary relief. An example is the Mayor of Los Angeles’ order issued on March 21st (effective until April 19th), which tolls all municipal code provisions regarding the expiration of building and other related permits and plan check applications and provides a sixth-month extension for the effectuation and utilization of approved entitlements, among other things. It is unclear whether other jurisdictions will issue similar orders or interim measures, so developers should proceed as though no general relief will be provided and proactively take steps to preserve their rights.

If you have further questions, please do not hesitate to reach out to the authors of this alert.

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