NEW ORLEANS — New Orleans building permit numbers rebounded slightly in 2021 and 2022 but still represented a reduction of more than 20% in the number of permits and a loss of more than $1.4 million a year in city revenues.
The city issued 25% fewer building permits in 2020 than it did in 2017 and the revenues the city collects from those permits fell by more than 31%, even though a housing boom and rising construction costs should have pushed those numbers higher.
Contractors and builders say the problem isn’t a lack of work but an epidemic of unpermitted construction going on across the city, driven by an overwhelmed and understaffed Safety and Permits Department at City Hall.
City officials are hoping those problems will ease with new permitting offices being built across from City Hall and 23 new building permit and inspection staff provided by four private firms at a cost of $2.1 million.
“There's a safety issue and then there's a lack of revenue issue,” New Orleans Chief Administrative Officer Gilbert Montano said.
From 2015 to 2018, the city issued at least 29,000 building permits each year and collected more than $12 million in 2017 and again in 2018 from fees based on the cost of each construction project. But in 2020, after a corruption scandal in the permitting office led to firings and retirements, the number of permits issued dropped below 23,000 and annual revenues fell to $8.5 million.
“I think that's a reflection of how many projects are being done, large and small, without permits,” said Michael Forster, owner of Forster Construction Services of Mandeville.
At its worst, construction work done without the proper permits or without the required safety inspections can lead to disaster. In October 2019, the 18-story Hard Rock Hotel had just topped out in downtown New Orleans when the top floors pancaked and crushed three workers to death. Three city inspectors had failed to show up and falsified safety reviews prior to the deadly disaster.
In a far less prominent example from September 2022, a house was being renovated in the Leonidas neighborhood without a permit. The electric meter was never shut off. Jose Bonilla, 50, was doing plumbing work under the house when he got caught in a tangle of wires. He was electrocuted and found dead by a coworker, according to a police report and the coroner’s findings.
Even if a lack of permits or inspections doesn’t cause death or serious injury, it can have other serious consequences. Forster said he’s been hired to fix damaged foundations and other construction errors after a review of city records showed the previous contractor’s work wasn’t properly permitted or inspected.
Forster spent much of the last two years documenting building projects that have started without any permit posted in the city’s public permitting database. He sent at least two dozen examples to the Safety and Permits Department in 2021 and 2022.
“I've got a permit going on at Chalmette right now for a project that works; no problem. Harvey, Jefferson Parish; no problem. So, it can be done,” he said.
City Safety & Permits Director Tammie Jackson and her staff have responded to several of Forster’s complaints by ordering unpermitted work to stop. But in some cases, the city has issued a violation, only to turn around within a few weeks to issue a permit for work that was mostly done.
Forster said the normal wait time for those who follow the rules and wait for permits to start working is now six to eight weeks, and he’s starting to lose jobs to competition that’s willing to work without waiting on the city.
“You're at the limit where you think, ‘Maybe I shouldn't even bother to get a permit,’” he said. “Nothing happens to people who don't get a permit if they do get caught. I mean, it almost seems like they get expedited in the permit process.”
New Orleans Chief Administrative Officer Gilbert Montano said he recognizes the city's building permit process is broken, and he acknowledged his efforts to revamp it over the last three years have not gone as planned.
Montano promised reform in March 2020, after a joint WWL-TV/Times-Picayune investigation found three city inspectors falsified their reports at the Hard Rock Hotel before it collapsed.
Three other inspectors later pled guilty to federal crimes for falsifying reports on other projects across the city. And three more were fired when WWL-TV exposed a web of self-dealing in the plumbing inspection office at the Sewerage and Water Board and the FBI raided it.
The plumbing inspectors were supposed to be consolidated under the Safety and Permits office, but that hasn’t happened yet. The city tried to hire about 50 new permit officials, plan reviewers and inspectors, but it’s still about 30 employees short, Montano said.
“Basically, the front door to development, building and revenue generation for the city, needed a facelift, needed an overhaul, needed some significant reform,” Montano said. “Progress was slower and inhibited from COVID, but our eye is still on the ball in building, rebuilding and establishing that trust. This is the vein of our economy, the development community, the construction community, the growth of our city.”
Montano believes new permitting offices and new hires using private staff augmentation will finally help turn the corner. The new offices are being built now on the eighth floor of a high-rise across from City Hall using a $540,000 construction allowance already in the city’s lease.
One of the new outside staffing firms, SAFEbuilt out of Colorado, is advertising for people without permitting experience to come to New Orleans to change careers. That worries David Schneider, a retired construction manager who oversaw large building projects in Louisiana and other states for 25 years.
“They have to understand the building process,” Schneider said. “You just can't pick somebody off the street, and they pass a civil service exam and not know anything about the construction code.”
A top City of Denver permitting official wrote in 2018 that SAFEbuilt staffers were failing to keep up with structural reviews there, a key part of assuring new building projects would be safe. SAFEbuilt responded by asking for more money from Denver to hire additional staff, and the city eventually approved a raise in the company’s contract from $2 million to $5 million.
A SAFEbuilt executive did not immediately respond to a request for comment Tuesday.
Montano promised the employees provided by SAFEbuilt and the other three staffing firms will be closely monitored by city supervisors.
“They have to be qualified for the work that they're going to do and they'll have to pass muster,” he said.
Montano said the new permitting offices planned for Orleans Tower should be completed in May or June. He said they will make the permitting process more user-friendly than it has been on the seventh floor of City Hall, where contractors must wait in an elevator lobby or down a hallway and aren’t generally allowed to meet with city staff in back offices to address permit and inspection concerns.
He also said a new permitting app is planned to improve on the One Stop website. Montano said it will allow contractors to follow their permit applications and inspection requests through the city’s approval process. He likened it to a pizza delivery app that tells customers when the food is being prepared, when it’s out for delivery and when it’s arriving.
Schneider think that’s just window dressing.
“If they're not processing the work in a timely manner, that app is a waste of money,” he said. “It's like building new offices now. You don't know what you're going to have at the end. You might have built something now and it's not big enough or too big. I mean, they've got the cart before the horse here.”
“I don't know why they have to reinvent the wheel,” Forster said.