Home ownership is key to generational wealth, but Real Estate Investment Trusts profiting in Middle Tennessee's low-income neighborhoods raise barriers to owning. (Photo: Getty Images)
A new law initiated by Gov. Bill Lee will allow developers to hire their own inspectors to check for environmental, safety and building violations on construction sites — bypassing city codes departments and the State Fire Marshal’s Office.
Lee, who made the measure a key policy priority this year, said it is intended to streamline the building process, particularly in rapidly growing Tennessee communities. “Time is money,” he said introducing the plan in his State of the State address earlier this year.
“Just take it from someone who spent 35 years in the construction industry,” said Lee. “A bureaucratic permitting process is bad for everybody but the government.”
Opponents of the law, including the statewide association of codes officials, say privatizing building inspections introduces risks.
For-hire inspectors paid by a builder seeking a favorable inspection have the potential to overlook key safety and building standards that apply to both single family homes and high rise office buildings.
I see a lot of potential for bad actors.
– Aaron Rogge, Tennessee Stormwater Association
In other words, private inspectors could have incentive to tell their boss what he or she wants to hear.
“The potential harm is they could approve construction that is not safe,” said Monty Kapavik, president of the Tennessee Building Officials Association and the codes enforcement director for Nolensville.
“Keep in mind the third party is paid directly by the builder,” he said. “ With local jurisdictions you don’t have that dynamic, because we’re not motivated by what they are paying us.”
Lee and state building associations that lobbied for the new law have cited lengthy wait-times for inspections.
But queries by the Tennessee Lookout to city codes departments across the state, and to the State Fire Marshal’s office, yielded a different picture.
Average wait times for an inspection vary statewide from the same day to six days for complex or large commercial projects, the Lookout found.
Law also outsources wetlands permits
The new law also allows builders to hire their own wetlands consultants to conduct reviews of permits, if delays by the Tennessee Department of Environment and Conservation exceed 30 days.
“I see a lot of opportunity for misuse or bad actors,” said Aaron Rogge, a Nashville-based civil engineer who is also the current president of the Tennessee Stormwater Association.
Privatizing a wetlands permit review is of particular concern after environmental groups earlier this year defeated a separate effort to remove all state regulation of more than half a million acres containing wetlands in Tennessee.
Rep. Kevin Vaughan, a Collierville Republican who sponsored that failed legislation, carried the governor’s law to privatize inspections.
In presenting the bill in the Legislature, Vaughan argued the measure would provide a “lifeboat” for project developers “who can say, hey we’re going to use our own folks on this because we know the timelines are so backed up.”
Developers, seeking to gain from building boom tied to Ford plant, push for weaker wetland rules
Currently, TDEC’s average review and issuance of a general permit is approximately 4 ½ days, according to a TDEC spokesperson.
“I understand the legislation will increase efficiencies and streamline the process, but will it do so at the jeopardy of wetlands and the natural environment or the soil,”said Rep. John Ray Clemmons, a Nashville Democrat who opposed the legislation.
Inspection times in Tennessee
Building inspections are typically conducted by city and county codes departments in the state’s urban areas and by the State Fire Marshal’s Office in rural areas.
In Memphis, where city officials introduced efficiencies in their permitting process five years ago, the average response time on a commercial permit review is six days; for residential it’s roughly two days, said John Zeahnah, director of Memphis and Shelby County Division of Planning and Development.
In Nashville, where codes officials conduct roughly 145,000 inspections each year, the typical turnaround time is one-and-a-half days, said Will Dodd, a spokesperson.
In Knox County, inspections for single family homes are conducted within two to three business days of a request while commercial inspections may take three to five days to conduct, according to Jim Snow, Knox County director of engineering and public works.
Supporters of the new law say it will cut delays, but a review of records in three major Tennessee cities show the average time for an inspection to be made ranges from same-day to six days for for complex or large commercial projects.
The Fire Marshal’s Office inspections for commercial buildings are performed an average of three to five days after a request has been made, according to Kevin Walters a spokesperson for the Department of Commerce and Insurance.
For residential projects, the average wait for an inspection is three days, he said.
Rachel Blackhurst, the Tennessee-based director of government affairs for NAIOP, The Commercial Real Estate Development Association, said her association backed the law to ensure fast processing times.
Construction delays, she said, “become extraordinarily costly; you’ve already gotten your financing in place once you’ve started permitting process, you are paying interest every single day you don’t have a building to sell.”
Blackhurst cited wait times ranging from three months to eighteen months on some projects, but said she did not want to call any jurisdiction out by identifying where such lengthy delays have taken place.
The law, she noted, will help ensure that delays do not happen in the future.
“So much of this for my folks, too, is predictability, not wanting to wait and take your chances if it’s bad,” she said.
The new law requires city or state officials to review permits and inspections submitted by private contractors, but it’s not yet established how those paper reviews will take place or what they will entail.
A conflict of interest provision prohibits anyone with a business or familial relationship with a contractor to conduct the reviews, and it sets out basic qualifications for the third parties hired to conduct site inspections.
Kapavik said he is not convinced the new law will cut red tape. In his role overseeing the city of Nolensville codes department, Kapavik and his staff often advise builders and their hired engineering experts on arcane codes requirements.
“We train for this,” he said. “And on average we fail about one-third of all inspections. We don’t consider that anything to brag about. We’re just showing you that there are mistakes made that we catch on a daily basis.”
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