By Skip Foster, Red Tape Florida
Regardless of what Floridians think about Austin, Texas, consider these four facts:
- Austin added roughly 120,000 housing units between 2015 and 2024 — a 30% increase in its housing stock — and inflation-adjusted rents have since fallen about 19% from their 2021 peak.
- City leaders commissioned an independent, top-to-bottom review of their own permitting and development process.
- Instead of asking what developers or the market were doing wrong, they asked a far more uncomfortable question: Was City Hall itself making housing more expensive?
The answer was yes.
Those four facts deserve more than a passing glance.
For years, the national debate over housing affordability has followed a familiar script. One side blames developers. Another blames zoning. Others point to interest rates, Wall Street investors, labor shortages or rising construction costs. All of those factors matter.
Austin decided to ask a different question.
Instead of beginning with the housing market, it began by examining City Hall.
During a recent appearance on Bloomberg’s Wall Street Week, Mayor Kirk Watson explained that the city deliberately focused on the things it could actually control. That meant asking whether Austin’s own permitting process had become so slow, unpredictable and unnecessarily complicated that it was driving up housing costs before construction even began.
It had.
“We focused on what we could control,” Watson said.
That’s what makes Austin’s experience so instructive. And its leadership so impressive.
Too often, governments begin with conclusions. They defend existing systems, blame outside forces or search for confirmation of policies they already support. Austin did the opposite.
It commissioned what Watson described as a “soup-to-nuts” review of its development process — not to validate City Hall’s performance, but to challenge it.
Government commissions studies all the time. Most examine problems outside government. Austin turned the spotlight inward.
That question alone deserves the attention of every mayor, county commissioner, city manager and planning director in Florida.
Whether Austin’s politics appeal to you is beside the point.
“We did a soup-to-nuts review of our entire development review process,” Watson said.
Leadership is measured by the willingness to examine your own institution before assigning blame to someone else.
When 1,500 Steps Isn’t About Exercise
Austin hired McKinsey & Company to evaluate its development review process. The consultants didn’t recommend eliminating environmental protections or gutting regulations. They concluded the city’s permitting system had become so fragmented that it was difficult to navigate — for applicants and, in many cases, for the city itself.
A typical site plan required review by 11 different city departments. More than 250 city employees participated in the approval process. Depending on the project, an application could pass through nearly 1,500 separate process steps before reaching the finish line.
Imagine running a private business where a customer request had to move through 11 departments, involve more than 250 employees and survive 1,500 procedural steps before anyone could say yes.
Nobody would expect that organization to be fast.
Nobody would expect it to be inexpensive.
Housing is no different.
The consultants also measured what applicants had experienced for years.
The average initial review approached a year. About 80 percent of applicants reported having to revise and resubmit plans at least three times before receiving approval. Some projects remained in review for well over 18 months. Customer satisfaction with the site-plan review process was effectively nonexistent.
The review identified problems that will sound familiar to anyone who has spent time around local government.
Departments interpreted the development code differently. Reviews were duplicated. Communication between departments broke down. Technology lagged behind the organization’s needs. Applicants often received conflicting comments from different reviewers, forcing another round of revisions, another round of meetings and another round of delays.
None of those obstacles were created by the private sector.
They were created inside City Hall.
Perhaps McKinsey’s most important contribution wasn’t identifying the delays.
It was measuring what those delays cost.
The consultants estimated that every additional month of permitting delay added roughly $9,700 to the carrying cost of a typical single-family redevelopment project and approximately $546,000 to a multifamily project.
Based on Red Tape Florida’s experience, those numbers actually seem low.
Regardless, this is the point where red tape stops being an abstraction.
Every unnecessary review, every redundant approval and every avoidable month of delay eventually shows up somewhere.
Usually, it’s in the price of housing.
Those costs don’t disappear.
They become part of the final price of the home or apartment.
Austin’s leaders viewed those findings not as an indictment of government, but as a management challenge.
Rather than defending the existing system, they standardized reviews, improved coordination between departments, clarified expectations, introduced performance metrics and began publicly tracking review times. According to McKinsey, initial review times were reduced by roughly 50 percent after the reforms began.
But faster permitting was never the goal.
More housing was.
Supply, Supply, Supply
Austin’s permitting reforms were simply the means to a larger objective.
As Watson put it, “The biggest thing we needed to do was reduce the red tape and the bureaucracy associated with building housing.”
The city wanted more homes built.
Anyone who has taken middle school economics understands the principle: prices are determined by supply and demand.
Permits determine when – and whether – homes get built.
When projects become more predictable, financing becomes less risky. When financing becomes less risky, more projects move forward. When more projects move forward, supply increases. And when supply begins catching up with demand, upward pressure on prices begins to ease.
That’s exactly what Austin set out to accomplish.
Rather than trying to solve housing affordability by having government build enough housing itself, city leaders focused on creating conditions that allowed the private sector to build more housing.
Over the past several years, Austin added roughly 120,000 housing units. As that inventory entered the market, rents declined from their pandemic-era highs, making Austin one of the few major metropolitan areas in the country to experience meaningful rent declines.
No serious economist would argue that permitting reform alone produced that outcome. Interest rates, migration patterns and broader market conditions all played a role.
But virtually every economist agrees on one principle.
When demand consistently exceeds supply, prices rise.
When supply begins catching up, price pressures ease.
Austin also examined whether its land-use regulations unnecessarily constrained housing supply. Changes such as allowing smaller lot sizes made it possible to build more homes on the same amount of land without expanding the city’s footprint. Combined with permitting reforms and other housing initiatives, those changes created conditions for a significant increase in housing construction.
None of this means every subdivision should be approved or every regulation eliminated.
Communities have every right to protect wetlands, preserve neighborhoods, require adequate infrastructure and insist on responsible development.
But every regulation should be measured against both its benefits and its costs.
That’s ultimately what makes Austin’s experience so relevant to Florida.
Tallahassee and Leon County have their own permitting challenges. Red Tape Florida has documented examples of departments working at cross-purposes, unnecessary delays and bureaucratic friction that increase costs before a shovel ever reaches the ground.
What Austin did differently was ask the difficult question first.
Is government itself contributing to the problem?
That’s a question every city and county in Florida should have the courage to ask.
Austin couldn’t lower interest rates.
It couldn’t reduce the cost of concrete.
It couldn’t stop people from moving there.
But it could examine the one thing completely within its control:
Its own bureaucracy.
That’s leadership.