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Priorities Podcast
Funding AI-powered building-code permitting
00:30:37
The Department of Housing and Urban Development l…
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- [00:03]
A
Welcome to State Scoop's Priorities podcast. I'm Keely Quinlan, a reporter with StateScoop. This week I interviewed Julia Richman, the former Deputy Executive Director and Deputy Chief Operations Officer with the Colorado Governor's Office of Information Technology and the current Vice President of Government affairs at the software company Clarity to discuss new grant funding opportunities from the Department of Housing and Irving Development that are available to states, cities and tribal governments to help streamline their permitting process with AI. We also discuss how attempting to solve this widespread problem inspired her company's work and how it's helping municipalities and territories solve these challenges with permitting. But first, here's what's happening in state and local government technology news this week, Texas Governor Greg Abbott announced the launch of a one Stop Shop website for comprehensive information related to the New World Screw and the state's response to the spread of the flesh eating parasite across parts of Texas and New Mexico. The website, which is located in the Texas Division of Emergency Management's Disaster Portal, provides information on the outbreak of New World screwworm cases as well as resources for farmers, veterinarians and residents. California officials recently kicked off the pilot phase of the state's Career Passport, a new digital credentialing tool designed to help workers showcase skills and qualifications gained through education, milit service, job training and work experience regardless of whether they hold a four year degree. The effort built on California's broader push to modernize workforce development and reduce barriers to state employment for workers without bachelor's degrees. North Carolina's Department of Information Technology announced that it has selected Tanium as the statewide endpoint management and cybersecurity platform for Secure nc, the state's collaborative cybersecurity security program. Tanium will help consolidate the state's management and security operations on a single platform with real time data and automated investigations of security threats. The voluntary initiative will roll out in phases across local governments, higher education institutions and other public entities that participate in Secure nc. At the end of May, the Department of Housing and Urban Development announced a new funding opportunity which offered states, counties, cities and tribal governments up to $3 million to deploy AI powered building code permitting systems and to partner with HUD to evaluate how well the systems work in real world conditions. Julia Rishman, a former tech official for Colorado and a vice president of the software company Clarity, said her company offers a solution to some of these common challenges with permitting and is helping governments to apply for the grant funds before the mid July deadline. We start with her own personal months long permitting experience in Denver and she shares how it changed her view of the issues with the process.
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B
So we lived for about 15 years in a house that was built in 1905, a 1200 square foot house. It was workforce housing for a rubber plant that used to be near our, near our neighborhood. And when we started to think about having children, I thought, I don't want to share a bathroom with my children and I need a bigger house. So we originally set out to build a new bathroom and then we ended up tearing our house down. And so we, we were hoping to renovate our old house and keep the character of that house. We got down to the demolition and the basement and the foundation was much weaker and in a worse state than we had imagined. And so we had already permitted for a project and then had to repermit for that project, which was going to be a new build. Exact same house, exact same lot, but just a brand new version of that house. Our permit application, our second permit application went in at the same time as the city was changing a lot of zoning regulations and was really focused on inclusionary zoning at the time. And those, those regulations were going to take effect July 1st. And so anybody who was paying attention was getting their permit applications in before that deadline so that they could work under the old paradigm. And so we went in with a glut of applications. And this was 2022, so a lot of employees had left the department following Covid. It's a very difficult job to be permit intake or plan review staff, just because it's so complicated. Folks who are coming to the counter have a lot on the line financially, you know, personally, you know, they're trying to build homes, they're trying to build businesses, and so it's really difficult. So we got in that glut and then we waited about seven months for the city to review our permit at all. So we had to move out of our house. We were paying our mortgage, we were paying rent, and construction costs were super variable at that time. And so the cost of our house actually went up about 20% in part due to lumber, et cetera. And so it was a really expensive prospect for my family, in addition to the fact that like, we were hoping to be in this house, right, and live there with our new children and da, da, da. So it ended up being quite a confluence of events. In 23, I had gotten introduced, or in 2022, I'd gotten introduced to the founders of CivCheck and they had asked me to become an advisor to their efforts. And I was really excited about that. In part Because I was going through my own permitting woes, but also I had gotten a lot of exposure to the challenges of permitting working for the city of Boulder where I led innovation and technology. So really, you know, worked firsthand with, with the planning department and understood, you know, just how difficult permitting and planning is for communities.
- [05:41]
A
Yeah. Wow, that is, that is crazy. You know, like most people think about like housing issues, right? Like, they think about like the cost of the actual construction. They think of interest rates, right. Like I'm in the process of like buying and selling my house currently, so that's always top of mind. And then zoning. But it's so much more than that, Right. Like, how do you think about like permitting as being part of this issue surrounding housing right now in the country? Yeah.
- [06:11]
B
So I think, I think you can think of the permitting challenge in communities in many ways. The first of which is often communities are doing a lot of policy making by means of the building and zoning code, right? They want to have more parks, they want to have more trees, they want to have denser housing, they want to have communities that are oriented around transit. Right. Like lots of things that happen in cities happen because of changes or modifications to the planning and zoning code. And so you end up with layers and layers and layers of laws, right. Think. I often think about it like the tax code, right? Which is just the average person cannot look at the tax code and say, I understand, you know, how taxes work in America. And that's the same for, you know, cities and counties across the country and really North America in general. So you've got this policy engine that happens by means of planning and permitting. And then you've got communities really trying to focus on safety and well being, right? So buildings have to be built in such a way that they won't catch on fire or that they are protected from wind or in places with lots of water that they're not going to get flooded during storms. Right. So, you know, communities are trying to keep themselves safe and occupants of building safe by means of that code as well. So you've got lots of policy dynamics. People pay fees for permits, right? And so if you're building, you know, a single family dwelling, it can be in the tens of thousands of dollars, depending on where you're building, to pay hookup fees and utility fees and, you know, permitting fees in general. And you've, and you've got, you know, the complexity of that, which is the volume and the changing dynamics of a community. So lots of people are moving to a place or lots of Construction, or we're building new neighborhoods, or we're redeveloping, you know, old areas. That can create, you know, pressures on the planning and permitting process as well. Well, so you've got all of this wrapped into, you know, really goals across North America. Cities in Canada and the US really are trying to build more housing. It is very difficult for, you know, a middle class person in America to, to buy a home. It's too expensive. You know, it's, it's really, it's really difficult. And so, you know, across North America, people are really trying to figure out the affordable housing question. And that really ties into this, this permitting issue. Cities often have big backlogs. It's really complicated to get through the permitting process. And that slows down housing. That means that builders have capital locked up. Right. In my case, it cost my family, you know, probably $100,000 and I was building a single family dwelling. But if I'm building an apartment building and I have to wait eight, nine, 10 months, you know, I'm, I'm gummed up in the system, my capital is earning interest and I'm not generating any revenue based on that. So, so lots of things tied up into this. And so cities are really starting to look at, and states really starting to look at how do we do permitting faster?
- [09:07]
A
Yeah, absolutely. There's so many factors. Right. Like in all of this that you've just touched on is like the external. Right. But you mentioned some of these backlogs that cities are dealing with. Can we dive into, like the nitty gritty, like open up the back office for me and tell me about, like, what are actually causing these backlogs, these issues? Where are the bottlenecks at?
- [09:27]
B
Yeah, in our experience, there's sort of two sides to the challenge of permitting. On the one hand, you know, an applicant may be dealing with the city for the first time. They may be updating their bathroom. They've never gone through that process. They don't know what is required by the city. It might not be clear what's required by the city. It might not be clear who they need to get reviews from or what kinds of documents, et cetera. And so on the one hand, you know, applicants often submit really low quality applications to jurisdictions that may be for two reasons. One, they don't exactly know what's required or what they're doing. Or two, sometimes because backlogs are so long, the actual, you know, professionals will get in the queue with a, you know, sort of high level design. Right. It may be an, an Incomplete design in order to just hold their place in line, right? Think about like buying concert tickets and your friend comes the night before and pitches their tent, right? It's the same idea. And so, so you've got, you know, contributions to this, this queue. And because applications are coming to cities that are not ready for permits, cities are going back and forth and counties are going back and forth with applicants to say, you know, you're missing these three documents, you don't have these right forms, your plans don't have the right information on them. And so, you know, those, those cycles, you know, typically we see three to six. But I've talked with communities that have as many as 20, 20 review cycles with their applicants. And that is not just one department, right? It might be multiple departments in the city. You might have someone in the water team, somebody on the fire, in the fire department, right? Somebody in the building or planning department, right. And so you've got lots of different stakeholders chasing down the same person to try and get a review ready, permit application to come into the city, right? So on the one hand, applicants come into the city really low quality, and then on the other hand, actually reviewing those applications is quite a complex task, right? You've got, like I said, that layer cake of policies and so trying to figure out what applies to a project at any given time. Those policies are coming online, they're sun setting, right? Think of the example I gave where the policies that impacted my family were going to come online in July, right? And so you've got things that are dynamic over time. You have, you know, a set of things which are written down, which are not necessarily black and white. Two people might interpret the code in two different ways. And jurisdictions, this happens all the time, right? What, what is the distance to an egress? Is it a diagonal line or is it a straight line? And so, you know, even between plan reviewers in cities, you might have disagreement about how different things apply, how to demonstrate compliance and what might be sufficient for an application. And so the second side of the problem is that the actual process of reviewing plans is very complicated.
- [12:13]
A
Yeah. Wow, that's so fascinating. Now, your company Clarity offers the Sivcheck platform, right? And when people hear, I think, AI powered, you know, permitting, for example, I imagine that some visual may be a robot, right, issuing this stamps. But that's not, you know, what AI's role is in this. So can you talk to me about what AI and how it works within the permitting process?
- [12:44]
B
So, you know, starting with the sort of, you know, is it A robot stamping an application. Let's start there with just the question of, like, how would you want to apply technology in a context which is really focused on health and safety? Right. And so our perspective is that a human being always needs to be in the loop in order to make expert decisions and use human judgment for the critical decisions. Our platform surfaces, recommendations and information and components of an application to the reviewer and to the applicant in order to get their feedback. Is this correct? Is this what you're trying to say here? Is this document what you say the document is? And so at every step of the way, the human being is interacting with AI, but the human being is always in the driver's seat. So that's a really important thing, right? We're not trying to replace city staff, we're trying to augment them. And really we're acting as a co pilot and support to applicants who are trying to get their permits in that permit ready sort of shape. What is really cool about our technology and technologies like ours is that it really takes out the sort of low value, time consuming tasks that don't really require human judgment, right. That don't require human expertise, but do take a huge amount of time. And so if you think about a plan set, right, my house that I built probably had, you know, 40 or 50 pages of plans. And on those pages, right, each page has to have a north arrow, right? And so in the pre AI context, you have a human being who's looking every single page of that plan set to ensure that there's a north arrow on the planet, right? And like, is that what a person goes, you know, into this field to do, Right? No, they want to make buildings safer and they want their communities to be vibrant, right. And so our platform will sort of like surface the north, north arrow or find the information on a plan set that, you know, a human being would take, you know, 15, 20 minutes to find. And so we're really surfacing all that information. We're looking for human judgment to make decisions, decisions and really accelerating the process. What's really, you know, nifty is that we're doing that on pictures, we're doing that on complex documents, and we're doing it in this very difficult paradigm, right? Policy paradigm, where lots of different things might apply. And so it's a really excellent use of AI in part because human judgment is driving the decision making, but in part because it's taking this really complicated problem for cities and making it easier.
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A
Yeah, yeah, totally. And you know, AI definitely has like the power to be used in this way for good. Right. To help make everybody's lives easier. But then on the flip side, there's this giant conversation ongoing about the technology's risks potentially. So how does like, AI work in this context, where it still maintains safety and code compliance? For example, like, we're talking about folks like, needing to issue these stamps of approval in order for people to live safe lives, but then also a public accountability, right. Like, residents want to know how this technology is being used. So walk me through, like, kind of where that puzzle sits.
- [15:57]
B
Yep. So our platform is built on an ethical AI framework. And, and ethical AI kind of includes a few different things. The first is that it's transparent. Right. You know, that you're using it and that you're interacting with it. Right. It's not a secret. It's not in the background. Right. It's front and center. In our platform, you have to acknowledge that you are comfortable working with AI. Right? So that's, you know, transparency. There is another bucket which is, you know, how do you know that the AI's decisions, you know, can you trace them? Can you understand how an AI determination or recommendation is being, is being made? Where is that information coming from? Right. So is it auditable? And, and then of course, the last bit is really that human in the loop. Right. So there are lots of different things that sort of take it from this black box, but then move it into the open air. And, and for us, that makes it worthwhile for communities. Right. You're not deploying something that's spying on people. That's, you know, creating, you know, inequity or challenges with, you know, access to government systems. In fact, the platform might actually make it easier and more equitable for the casual applicant to interact with the city, because the platform doesn't know that you're a big important developer in a community. They just know that you've submitted this application. Right. And so there's some really interesting dynamics that can happen there. What I'll also say is that, you know, cities are really suffering right now from a lack of housing. And, and so in this case, can we take a new and novel technology, apply it in a way that, you know, like I said, might actually improve equity and help to solve a critical policy problem. And so, and I think that's, you know, where we, where we can get some really interesting dynamics, you know, holding the data center conversation aside. Right. All AI requires data centers, and there's a lot of community interest in the topic at this moment. And I live out, out west, and we don't have any water right now, so lots of conversations about that. But, like, the actual application of the technology, you know, is that valuable? What I'll also say is that not all AI is the same. Right. So when people think of AI these days, they think of ChatGPT or, you know, some sort of chatbot conversation pal. And, you know, there are hundreds of kinds of artificial intelligence, and not all of them are sort of the large language model, highly consumptive, highly expensive technology. And so as communities are sort of exploring like, where do we feel comfortable using AI, they should also be asking the question of, like, what AI works for this kind of problem. Right. In the same way that you wouldn't like, you know, use a jackhammer to like, open your mail. Right. You're going to use a letter opener. Right. And so as communities sort of move forward in this AI paradigm, having good education and good discernment about what AI works in what context, I think really matters, and so moving the conversation forward from AI to the kinds of tools that might apply to the particular problem, I think it's going to be the differentiator between those communities that are able to move forward with novel and modern tools and those that are stuck in this, this sort of concern death spiral around, you know, AI taking over the world.
- [19:24]
A
Yeah, absolutely. Thank you for breaking that down and kind of dispelling some of those, like, confusions about it. That was super helpful. I like the jackhammer analogy. I'm probably going to borrow that.
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B
I mean, you know, what could be said too is like, all of these large language models are heavily subsidized right now. Right. And so eventually we're going to get to a paradigm where, you know, supply and demand, meet price, meetup price, and it will be really expensive. So folks using good judgment to pick the kinds of AI that. Right. Not the jackhammer, but the mail opener, the letter opener will be really kind of future proofing their jurisdictions.
- [20:01]
A
Yeah, absolutely. So Honolulu recently deployed Yalls technology, and the city's planning director recently described it as TurboTax for permitting. So what does that mean? And like, can you talk me through maybe some of the results that the city has seen from putting this to use?
- [20:20]
B
Yeah, a few things to say about that. We've been live with Honolulu for just under a year at this point, and the way that they chose to deploy it was as an optional platform which has created, at least at the beginning, and that has created this really interesting natural experiment. So applications have gone through civ check or they haven't gone through Civ Check and the kinds of applications going through both business processes are similar. Right. It wasn't like all the good ones went through Civ Check and all the bad ones went through the previous process. And so we've been able to really have great data about how well the platform is working for that community. And what we've seen really is that they've seen a 60% reduction in review cycles. So what used to be three cycles is now one cycle. Meaning, you know, permits are getting approved on the first go. We've seen a significant reduction. Really everything is sort of in the 60 to 70% realm, a reduction in the time for reviews as well. So, you know, if something sat in the queue for seven days, you know, now it's sitting in the queue for two days and then, you know, the overall issuance on the first go around is much higher as well. So, you know, much more complete, much more compliant applications are coming into the city and that's, you know, verified by really cool, high quality data that the city's been able to gather. They've been an excellent partner to us too with this deployment and we've done a lot of kind of co learning and collaborating throughout the process. It's been really exciting.
- [21:52]
A
Yeah, yeah, totally. And as far as like new opportunities come, I know the U.S. department of Housing and Urban Development just recently, I guess at the end of May announced a couple of grant opportunity for permitting technologies such, such as, such as Clarity's. So what is available exactly to cities right now and why is that so important, like you mentioned in this moment?
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B
Yeah. So you know, if you think about sort of the budget of a city, right. A lot of cities are dealing with financial pressures now. The cost of inflation is, is really impactful to cities budgets. You know, they buy a lot of concrete, they buy a lot of wood, pens and pencils, right. Everything that costs 25% more or 10% more, right. Impacts the budget of a city. Lots of cities are dealing with sales tax issues and shrinking tax bases or changing dynamics with their taxes. And so cities are looking to do new things with less money, right? And so that's always the thing in government is like more with less. But in this particular moment, right, you've got a lot of new tools and you're sort of the pie for spending on planning or community development solutions is the same or smaller than it used to be. And so grants like this that's coming out of HUD really provides an opportunity for communities who want to try these new technologies but can't find the budget to do it. HUD has made available $3 million in grant funding. It is to fund up to six grants ranging from 300K to about 1.5 million. The grants cover three years of programming, so that is implementation, you know, testing and you know, keeping live a system like ours for three years. The grant covers everything from operational expenses in a city to the software itself. And so it's really comprehensive and seemingly pretty flexible for communities to kind of get to, you know, work with our technology or others and really understand, you know, over a multi year period, if it's, if it's bringing down their permit timeframes, et cetera, the sort of talking points in the grant. And you know, I don't work for hud, so I can't speak, you know, for them. But what it says in the grant is, you know, wanting to get more information and data to the, to the public and to other communities about platforms like ours. Right. There's new technologies out there. How well is it working? How do we know? And then creating a better knowledge store, you know, sort of across America about what, what can communities expect when they deploy these kinds of technologies. So for us it's really exciting because, you know, we're eager to partner with, you know, communities who want to, want to try technologies like CivJack and this is a really awesome opportunity to do, do that.
- [24:46]
A
Yeah, yeah, absolutely. And I Clarity is helping cities apply. Right. For, for free. Why did the company decide to take that approach to this grant?
- [24:57]
B
Yeah, well, we can provide a lot of information to communities that want to pilot or, or trial our, our technology. Right. So it's everything from, you know, work plans and cost estimates and you know, what does it actually take to implement? Communities shouldn't guess about that because there are platforms like CivCheck that are live. We've got lots of experience. You know, our platform has been deployed in about 20 different communities in various, you know, pilots or implementations. And so, you know, it's not an unknown factor to add into a grant application. And we thought, you know, if folks really want to have a solid grant application, then that partnership is worthwhile.
- [25:37]
A
Yeah, absolutely. And Clarity has also been leading some AI education efforts in cities across the country. What are you from that hearing from local leaders about where they're at in their AI adoption journey? Like would this be something to deploy CivCheck be like monumental in terms of first AI tool or platform deployed? Or is it more like we're going to incorporate this into our suite of what we're already using.
- [26:06]
B
Yeah, I think we see a pretty wide variety of experimentation in cities. So lots of cities are doing the Microsoft Copilot or ChatGPT for enterprise kind of experiments. But we've also seen governments like Oakland and Louisville, Kentucky release RFPs or RFIs that say, can your AI fix our problem? Kind of thing. Looking at, know, defining the use cases for their communities and then seeing what kinds of technologies might apply and might help solve the problems of those use cases. Through our AI studio, I think we're already seeing, you know, cities acting really differently with regard to AI. Right. The planning department's got a real problem in their permitting and they want to, you know, reduce their backlogs and they want to accelerate housing. And so like, is it, is AI going to be our best use case? Right. As opposed to sort of a, you know, front end chatbot for constituents or that kind of thing. So I think communities are really looking at this differently. Our AI studio is aimed to help communities really understand, like, how AI could apply in their workflows and also what are the right kinds of AI to be considering. Right. So thinking about ethical AI, thinking about the right kinds of AI for the right part of your problem, set your solution set. Right. We get a lot of hype right now about AI solving all the problems. And what we see in the research to date is that a majority of AI deployments fail and they fail to meet the goals. I think it's somewhere between 70 and 80%. Right. And part of that is you're applying AI to business processes that are badly defined. Right. And that is a age old question of technology is like, if you have bad business processes, applying to technology, applying technology to them does not solve the problem often. Right. Because you're just automating a bad process. And so AI is just automating a bad process faster. And so, you know, making sure that you're really putting the right tool in the right part of the process, understanding what problem you're trying to solve. Right. And so the studio will help sort of uncover that with communities. And so far it's proved to be a really exciting collaboration.
- [28:09]
A
Yeah, yeah, absolutely. Well, to wrap this up, if we were to have this conversation in say five years and a number of cities, right. Were able to go down this journey successfully and modernize their permitting processes, what would that mean for like housing affordability or like development timelines or just like the overall, I guess, resident experience? Right.
- [28:32]
B
Yeah, I can think of a sort of a parallel of what I imagine the future to be, which is in, in Colorado, where I live, the the DMV moved a majority of business processes online. And so what used to be this horrible experience of like wasting a whole day of work seeing, standing in the line of the DMV to get a new picture of yourself put on a piece of plastic right now is done pretty much instantaneous. The, you know, the DMV in Colorado emails you to say your license is about to expire. You don't like, get to a restaurant and they say you can't have this glass of wine because your permit, because your license is expired. They say it's coming up, they send you a new one. Right? It's like this is what the experience of government should be, is just like easy, seamless, thoughtful, engaged. Right. And so if I think forward about five years, I think that's where we can get to with permitting is taking something that's super complicated and really intimidating and making it very seamless for the applicant and making it easy for cities to ensure compliance with their goals that are articulated in the building code. So I think that, you know, the fear of the backlog or you know, people waiting to do construction because like the queue is too long or you know, having these project timelines that are multi year because like at least one year is just sitting, waiting for the city to review. Right. I think all of that can go away because we've applied really great technology to a very difficult problem.
- [30:03]
A
That was Julia Richman. We are sending our many thanks to her and her organization for participating in that conversation. You can subscribe to the Priorities podcast@monities podcast.com and wherever you get your podcasts. While you're there, be sure to leave us a review or a rating on the podcast page. That small extra step helps more people like you find the show. This podcast is a production of Scoop News group in Washington D.C. production work is done by Carlin Fisher until next week. I'm Keely Quinlan. Thanks for listening.