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MIAMI TODAY

VIEWPOINT

WEEK OF THURSDAY, MARCH 23, 2017

Miami Today is an independent voice of the community, published weekly at 2000 S. Dixie Highway, Suite 100, Miami, Florida 33133. Telephone (305) 358-2663

Too much time in permitting is too little money for Miami We used to learn by the grapevine that getting a building permit was slower in one city than another. For example, we always heard that Coral Gables could take seemingly forever to get a small project permitted. But thanks Michael Lewis to the Internet, we can now read officially what virtually every community tells us about how long a building permit for a single-family home or a small renovation is going to take and plan accordingly. One of the longest waits nationally is San Diego, where such a permit typically takes six months to a year, the city says candidly on its website. Massachusetts says “building permits that do require plan review will typically be issued in two to three weeks but could take longer during peak times of the year depending on the workload.”

In Washington State, Seattle takes 120 days, longer if corrections are needed, while rural areas cite three to four weeks to issue a permit. In Stevens County, “we can normally complete plan review and issue a permit within 7-10 days.” Almost every jurisdiction, no matter how small, is clearer about how long it takes than the City of Miami, which nonetheless sounds fastest. Miami’s total timing explanation is: “The time to get a permit issued varies. Some permits can be issued the same day, over-the-counter and others require that the plans be left for review.” It turned out that when Commissioner Francis Suarez asked for a study last year, he learned that “left for review” meant close to a full year – an average of 310 days to get a permit for a single-family home or a $100,000 or less remodeling or project. If you wonder why so many unpermitted – meaning illegal – remodeling jobs are being done all over Miami to the detriment of the city as a whole, look no farther than the wait. Are you going to wait a year to get a permit to build a fence or a shed? Nobody does. Yes, some folks are happy to avoid Miami’s permit fee, which starts at $32 for the first $1,000 of value and grows by $16 for every

$1,000 thereafter. A permit for a $50,000 job, for example, would cost $816. But it’s not the red ink in a fee so much as the red tape in getting a permit that leaves the city with a red face for so much unpermitted work. As we reported last week, after last summer’s study the city was able to trim time from the average wait from application to the day a homeowner can work on the deck or driveway legally. The more light on the problem, the shorter the wait is likely to become. Not all the delay is due to city bureaucracy. Virtually every jurisdiction in the nation says the better the plans that are submitted, the faster a permit will be issued. Quality of plans is the single biggest factor in permitting time. But the Miami study found that plans often had to be reworked 10 times or more. Nobody else in the nation that we could find cites a two-digit number for required reworking of plans. That leads to the question of whether, in Miami’s zeal to get it absolutely right, the city is asking more than is needed for small jobs. There might be some value in issuing permits for projects that are slightly less than perfect in order to avoid homeowners

A bright spot for the US in global commerce In both political and military battles there are casualties. During the past election season, one of the most notable casualties was free trade. The bipartisan piling on – slamming NAFTA, TPP, WTO and single nations (mainly Jerry Haar China, Mexico and Japan) – is without precedent. As for proponents of free trade, their silence is deafening – fearful of retaliation by a public whose rudimentary understanding of international commerce would fill half a thimble. Business and government leaders in trade-dependent cities on both coasts and the borders with Canada and Mexico are especially concerned, as well as perplexed that so many of their citizens are supporting candidates who espouse protectionism and isolationism. (Talking about shooting oneself in the foot.) Ironically (and happily) the anti-trade minions are not anti-foreign direct investment – as long as that investment is inward bound, not outward bound. And fortuitously, whatever the national and congressional outcomes in November, inward flows of investment will continue unfettered. Just what is the nature, scope and size of that investment and what does it accomplish? Foreign direct investment (FDI) presently exceeds $3 trillion, and the US remains the preferred destination for investors worldwide. With an unrivaled consumer market, excellent systems of higher education, skilled workers, entrepreneurial and innovation-oriented culture, a transparent and regulatory environment, and the largest venture capital and private equity market in the world, the US will continue to be #1 in attracting overseas investment. Interestingly, eight countries account for 80% of FDI: the UK, Japan, the Neth-

The Writer

Jerry Haar is a business professor at Florida International University and a global fellow at the Woodrow Wilson International Center for Scholars in Washington, DC. His latest book, co-written with Ricardo Ernst, is “Innovation in Emerging Markets.” erlands, Canada, France, Switzerland, Germany and Luxembourg. Notable, however, are the inroads made by several emerging markets, especially China that grew by 30% last year to $15 billion. New York led the states with several large real estate and financial services transactions. And in response to those who believe that we don’t make things anymore and that all our jobs are being shipped offshore, the truth is that manufacturing is the largest industry by far for foreign investors, with chemicals being the leading sector. Most visible to the average American, however, is the automotive industry. In 1992, South Carolina ushered in the new wave of investment by foreign carmakers in the South by offering BMW a package that was ultimately worth an estimated $150 million. A decade later, the state put up an additional $80 million in infrastructure aid when BMW decided to expand its operations in the state. In 1993, officials in Alabama lured a Mercedes-Benz facility, the first foreign auto plant in the state, with a package worth more than $250 million. Today, Acura’s RDX is manufactured in Liberty, Ohio, with 70% American parts; Nissan and Infiniti in Smyrna, TN; VW in Chattanooga; Toyota in Kentucky and Michigan; and BMW, Honda, MercedesBenz, Kia, Subaru and other big foreign automakers are manufacturing in the US. Be that as it may, it is in the area of services where the US competes most effectively, running trade surpluses and attracting huge amounts of foreign investment, with real estate, financial services and

information technology leading the way. One of the best examples is South Florida, where FDI in real estate is one of the key drivers of the economy. Last year, foreigners spent $6.1 billion on Miami-area real estate – 36% of all such investment. The reasons vary from opportunity buyers such as those from the Middle East who spent more than $500 million on Miami commercial and residential real estate in the past 18 months, to necessity buyers such as Brazilians and Venezuelans concerned with insecurity and political and economic troubles in their homelands. Since Miami is the preferred “second home” for Latin Americans, it is no surprise that real estate and the services industry, in general, would rank among the highest among US locales for business investment. Cognizant of the huge impact made by FDI – employment, knowledge transfer, tax revenue and other multiplier effects – states and municipalities across the nation are in vigorous pursuit of FDI on a global scale. South Carolina has successfully recruited companies from overseas, such as Michelin in the transportation sector. Virginia’s Economic Development Partnership boasts 700 internationally-owned companies in the state and last year announced a $2 billion investment from a Chinese pulp and paper manufacturer to establish its first US advanced manufacturing operation, creating 2,000 jobs over five years. In Florida, both Enterprise Florida at the state level and the Beacon Council at the Miami-Dade County level have achieved notable success in their global efforts to attract FDI across of range of industries, as in the case of Embraer, the Brazilian aerospace company that opened a manufacturing facility on the state, creating 600 jobs. Free trade may have been the whipping boy for politicians and candidates for office this past election season. However, we should all be grateful that inward bound FDI was spared vilification. It is the one area of global commerce where the economic benefits far outweigh the consequences.

and small contractors taking the illegal but frequent step of simply working without a permit and therefore without any oversight or building inspection at all. Is some oversight, in other words, better than none? It’s a question city officials might carefully ponder. If they demand something that’s too hard to get, illegal work will make the city the worse rather than the better for its perfectionism. The city might also be more candid about how long it really takes to get a permit and be legal in small projects. If the average is 310 days, as it was last year, or 250 or whatever as it might be now, shouldn’t the city’s website say that rather than saying, as it does now, one day or maybe longer? How about truth in advertising? Meanwhile, we commend city commissioners for looking carefully into the time lag and trying to do something about it. The faster they push the process, the more improvements are going to get done, the better the city’s homes are going to be, and the more jobs will be done legally – paying the city for a permit – and the fewer illegally, paying the city nothing. Time, it turns out, is money for both the homeowner and the city.

Letters to the Editor Leave Calle Ocho alone, and survey the merchants

I agree with the general concept of last week’s Little Havana report, except that it is a mistake to turn Southwest Eighth Street into two-way traffic or turn a traffic lane into a dedicated bicycle lane. Neither do I believe that the traffic should be reversed at the expense of wasting several hundred thousand dollars for little benefit to the merchants. The most important stakeholders are the merchants, who should be contacted and surveyed before any decision is made. They are the ones who would be directly affected by any changes. It should also be noted that the elimination of a traffic lane will impact Brickell and Downtown in a very negative way. Like it or not, Southwest Eighth Street is a main road to access those areas that keep growing on a daily basis, and most people use cars and not bicycles. Leave Southwest Eighth Street as is and beautify it with more lights and landscaping. Pablo Canton

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Miami Today: Week of Thursday, March 23, 2017  

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