Denver homeowners and builders faced major residential permit delays. A new audit sheds more light on why.

Review errors, unreliable data and poor oversight in Denver’s planning department exacerbated permit delays for home construction projects and renovations as wait times grew significantly during and after the pandemic, a new city audit says.

Between 2020 and the first part of 2023, average wait times for residential project permits grew by 75%, or 113 days, according to the report, released Thursday.

Auditors identified a lack of clear training processes and a need for better data collection as key factors contributing to the delays within the Denver Department of Community Planning and Development. Those hamstrung the overburdened permit review staff even as the city outsourced reviews and took other measures to try to get the delays under control — eventually seeing wait times fall last year.

But City Auditor Tim O’Brien says there’s hope for further improvement.

“By implementing recommendations for stronger policies for oversight and data reliability, the (department) will be better able to ensure permit applications are reviewed and approved consistently and in a timelier manner,” O’Brien wrote in the cover letter for the audit report.

City planning officials say changes they have already made have cut into the project backlog. The delays ballooned during the COVID-19 pandemic, affecting both residential projects as well as more complex commercial projects, which include larger multifamily developments such as apartment buildings.

The department also said it had addressed many of the recommendations in the audit, which zeroed in on the residential plan review team, ahead of the report’s release.

“Today, residential plan review times — for single-family and duplex projects — are averaging two to four weeks, compared with 12 to 15 weeks in the fall of 2022,” said a statement issued by CPD spokeswoman Alexandra Foster. “The audit’s findings are in line with what our team had previously identified and is already working to address.”

The slow pace of permitting and planning reviews at city hall long has been a source of consternation in Denver — especially in recent years, when pandemic-driven budget cuts and a hiring freeze helped drive up wait times, as The Denver Post found in a 2022 investigation.

Those delays had ripple effects at a time when the city was struggling to meet the demand for more housing of all kinds, and more affordable housing in particular.

The residential plan review team evaluates projects dealing with single-family homes and duplexes, including significant remodels or additions. It saw its workload explode in the early years of the pandemic, when cooped-up homeowners across the country turned their focus to improvement projects.

After fielding 2,758 online permit applications in 2018, the department received 5,226 in 2020 and 6,410 in 2021, according to the audit team’s research.

The key finding of O’Brien’s report is that the residential team lacked established and formal processes for a number of its key functions. That shortcoming contributed to hiccups and delays that could substantially impact property owners and developers. The situation was exasperating for builders of new houses, since permit and plan reviews are just part of a long city process they must navigate.

In a survey of 55 applicants who received residential permits from the city between January 2022 and April 2023, seven said long wait times drove up the costs of their projects. One put the price tag of the delays at more than $24,000; that applicant completed the work without a permit, according to the audit report.

Ten of those 55 respondents said city staff members made an error during the review process, another possible contributor to delays.

O’Brien hammered on the risk of unpermitted work — which skirts the law and evades scrutiny ensuring the project meets city codes — in a news release about the report.

“Inconsistencies and errors in the process for issuing home renovation permits could lead more people to do the work without any approval at all,” O’Brien said. “That puts residents and the community at risk if something were to go wrong during construction or sometime in the future.”

The audit report set out 20 recommendations. Those included reviewing, updating and finalizing training guidance; developing rules to better monitor contracted staff; and figuring out what resources the planning department needs to respond to applicant questions during the review process.

The department, in an audit response letter sent Jan. 4, agreed to most of the recommendations. By March 1, the department expects to have completed standardized training frameworks for all of its plan review teams, including the residential group.

The department rejected three recommendations related to contract administration and other issues that it says it has addressed to its own satisfaction.