Third-party reviewers expand permitting capacity without expanding government

Housing permitting reform has become one of the few housing policies to attract support across the political spectrum. States as politically diverse as California, Colorado, Florida, and Washington State have adopted reforms intended to reduce unnecessary delays and increase housing production. Many of these reforms, including statutory shot clocks, focus on changing rules, deadlines, or procedures. But deadlines alone cannot ensure that building plans are reviewed on time.

When permitting departments cannot keep pace with demand, delays persist despite procedural reforms. Third-party review offers a practical, market-oriented solution by allowing jurisdictions to expand review capacity without permanently expanding public payrolls.

Permitting systems are built around administrative capacity that does not always adjust as quickly as housing demand. Economic growth, population changes, and housing shortages can create periods when application volumes rapidly increase.

Unlike private firms, which can scale operations in response to market conditions, government departments often operate within fixed budget cycles, lengthy hiring processes, and administrative constraints that limit their ability to respond to sudden increases in workload. Without a way to adapt, temporary surges can become persistent backlogs that delay housing construction and increase costs.

The challenge is particularly acute for smaller jurisdictions. A large city may have enough permitting activity to justify maintaining specialized staff across multiple areas, while smaller municipalities may struggle to justify those positions year-round. Third-party review allows jurisdictions of different sizes to access specialized expertise when needed without requiring every locality to maintain the same level of internal resources.

Addressing these bottlenecks requires a permitting system with more flexible sources of expertise. Third-party review provides a market-based solution to this problem by allowing jurisdictions to access qualified private-sector expertise when existing systems cannot keep pace with demand.

Under these systems, governments establish standards, qualifications, and oversight requirements, while approved outside reviewers assist with portions of the review process. This approach does not change the requirements that projects must meet or remove government authority over permitting decisions. Instead, it allows governments to supplement their existing capacity when workloads increase.

The advantage of third-party review is flexibility. Private-sector providers can scale operations, develop specialized expertise, and respond to changes in demand without requiring governments to permanently expand their workforces to accommodate every potential surge in permitting activity. By providing additional review capacity when needed, third-party review can help reduce backlogs while maintaining existing standards.

Predictability is another benefit of a more flexible permitting system. Developers make investment decisions based not only on whether a project will receive approval, but also on how long that approval process will take. By reducing uncertainty in the review process, third-party review can improve project viability and make housing supply more responsive to market demand.

The rise of third-party review is itself an admission: government agencies do not always have the resources, expertise, or flexibility to handle every responsibility placed before them. Governments at every level routinely rely on private-sector providers when internal systems cannot efficiently meet program demands.

Permitting is no exception. When housing production depends entirely on whether agencies can process every review internally, the regulatory system can become a barrier of its own making. Third-party review provides a way to reduce those bottlenecks by allowing private providers to assist with technical functions while governments retain control over the standards they impose.

Florida’s Private Provider Program illustrates how this model works. Established by state law in 2002 and expanded under legislation signed by Governor Ron DeSantis in 2021, the program allows private providers to perform certain plan review and inspection functions while local governments continue to oversee compliance with adopted codes. The takeaway is simple: effective government does not require government to do everything itself.

Third-party review can help relieve permitting bottlenecks, but it cannot fix every problem created by an overly complex approval process. If jurisdictions maintain duplicative reviews, unnecessary procedures, or unclear standards, adding more reviewers may simply make an inefficient system move faster.

Long-term reform requires both greater administrative flexibility and a closer examination of whether every existing requirement is necessary in the first place.