San José is the tenth most populous city in the United States, and the economic, cultural and political center of Silicon Valley. It is also currently experiencing a Housing Crisis that threatens the long term success of the City and the region. While the local economy is continuing to expand and create demand for high-skilled worker housing, San José’s housing market has matured and slowed in part due to increases in costs associated with new construction. From 2010 through 2018, an average of 2,800 housing units were permitted each year, too slow of a rate to achieve the City’s target to permit and build 25,000 over a five-year period ending in 2022. To accomplish this ambitious housing goal, the City must transform the entitlement and permitting process to respond quickly to the current market conditions.
Recognizing this colossal challenge, the City has initiated a transformation effort of the people, processes and technology that compose the Development Service Partner’s permitting workflow. This transformation effort kicked off in late 2018 initially focusing on the technology upgrade of the existing permitting system and the addition of new core technologies to bring our permitting process into the 21st Century. While this initiative has experienced some early technology successes, the opportunities to improve our processes have received less attention.
While the overall permitting process is complex with many steps, there are two services within the entire process that have experienced significant impacts from the increase demand for permits. First is the services provided by the Permit Center where customers can ask questions, submit plans and pick up their permits. The demand for these services has ballooned in recent years causing long wait times for customers, often exceeding three or four hours. As a result of these challenges, customers are getting a negative perception the Development Service Partners’ services and applicants are being discouraged from attempting to start the permit process. This results in lost development potential for the City at a time when all development is critical to addressing the dearth of affordable housing in Silicon Valley.
The inspection process also experienced major service slowdowns. After building construction reaches certain milestones, customers call to schedule an inspection to confirm that the construction was completed as permitted and to prevent any unsafe structures. The inspection team has the objective of scheduling all inspections within 48 hours of the customer’s phone call. Historically, however, the average wait for an inspection was up to a week but now in late 2019 ballooned to two or three weeks. Small residential customers who must wait for the most minor of inspections are growing frustrated. Large development projects, whose waits for inspections can cause major delays in the construction process, are facing major financial costs for delays that are preventing much needed housing units from opening.
As a result of the challenges outlined above, the average San José resident has a negative perception of the permitting process and its accessibility. This fuels frustration and the common belief that the City of San José isn’t doing enough to address the Housing Crisis in the city. Improvements to these processes will not only signal to the development community that San José is ready and welcoming of much needed growth in the region, but also signal to the residents of the city that their government is addressing the most challenging crisis local governments have faced since the Great Recession.
Starting in April 2020, it is proposed that the FUSE Fellow will begin conducting a review of two critical permitting processes: permit center customer service and building inspection. The Fellow will need to interview key stakeholders in this process from both the City’s and customers’ perspectives. Following a comprehensive understanding of the existing process, the Fellow will begin to assemble best practices and recommendations for improvements to these processes. The recommendations should derive from stakeholder interviews, research from nationwide best practices, and lessons learned from similar private sector activities.
The Fellow will then convene various stakeholders to test the recommended ideas that will transform our business processes and solicit input for implementing the recommendations. The plan should address the root causes of the suboptimal operations and identify a path to sustainable alleviation of these issues. The recommendations will culminate in a final presentation to the Development Service Transformation Executive Team who will vote to approve or modify the transformation approach for the Fellow.
The Fellow will use the direction from the Executive Team to develop an implementation plan with necessary resources and timeline. With guidance from the Executive Team and other stakeholders, the Fellow will implement their plan for the Department to begin recognizing the benefits of the improvement initiatives. The implementation will require working closely with frontline staff who are responsible for the core operations of permitting in San José. The Fellow should identify key success criteria for the implementation and identify a data driven approach to analyzing the impact of the improvements to the overall permitting process.
- Conduct a thorough review of current processes – Become immersed in all aspects of the Permit Center and building inspection operations. Interview various department stakeholders and customers to understand the challenges they face in these processes.
- Research best practice – Review national literature about permitting reform innovations and identify lessons from private sector practices for excellent customer service.
- Document processes and develop recommendations – To tell the story of the necessary improvements, the Fellow should document their learnings from their review of the processes and identify core issues. Outlining a system maps of the two identified process areas will help clarify the issues to be resolved and create a clear path for the Executive Team to understand the future end state the Department should strive for.
- Develop a rollout plan and begin implementation – Create a sustainable multi-year approach to permitting reform that incorporates phased rollout to build moment and ensure smooth transition for all stakeholders. This should include a change management and communication plan, as well as a plan for training necessary City employees on the recommended improvements to the process.
- Engagement internal and external stakeholders – Establish strong relationships with the key players in these process reforms to ensure buy-in and successful implementation.
- Chu Chang, Assistant Director of PBCE and Chief Building Official, will supervise the Fellow and serve as the executive champion to ensure that this project achieves its full potential
- Alex Powell, Chief of Staff of PBCE, will work directly with the Fellow on a day-to-day basis to support and oversee progress towards goals.
- Erica Garaffo, Process Transformation Lead in the Office of Civic Innovation, will also support and advise the fellow on a day-to-day basis.
- Other key stakeholders who will support and advise the Fellow:
- Rosalynn Hughey, Director of PBCE
- James Son, Deputy Director of Building
- Kip Harkness, Deputy City Manager
- At least 15 years of professional experience in a relevant field, with particular experience in customer service operations in the private sector. Familiarity with operations management, analysis, improving service conditions, and removing inefficiencies.
- Experience overseeing or managing a complex business operation with various component business units.
- Ability to understand the human component of operations change management and to connect and collaborate across a variety of disciplines.
- Superior critical thinking and analytical skills. Ability to get up to speed quickly on business operations.
- Strong communication skills with the ability to synthesize complex information into clear and concise summaries for both executive leadership and frontline staff.
- Record of successful transformation and experience on implementing change management initiatives and continuous improvement methods in a large organization.
- Self-motivated, goal-oriented leader who is resourceful in creating novel solutions to complex problems.
- Ability to relate to a wide variety of diverse audiences with strong emotional intelligence and empathy.
- Excellent stakeholder engagement skills and ability to use facilitative leadership techniques to coordinate stakeholder initiatives.
- Persistent in obtaining information and creatively resourceful in identifying solutions to complex problems.