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Aug 20, 2023

Why Are Permit Expediters Needed To Cut San Francisco’s Red Tape?

San Francisco is famous for red tape. The city’s construction permit system has a reputation among residents, contractors and engineers as being lengthy and complicated to manage. Anyone who wants to

San Francisco is famous for red tape.

The city’s construction permit system has a reputation among residents, contractors and engineers as being lengthy and complicated to manage.

Anyone who wants to do any work that goes “beyond painting, flooring, replacement of electrical receptacles, switches or light fixtures and repair or replacement of faucets” must obtain permits, according to the Department of Building Inspection.

The majority of commercial or residential permits are classified as “over the counter” while the remainder would be considered “full” or “site” permits, which require in-house reviews unlike “over the counter” due to the structural nature of the work.

Many people with complex projects opt to hire an “expediter”—“an individual who receives or is promised compensation to provide permit consulting services” on projects that would be classified as either major or minor, according to the city’s Ethics Commission. This can also include any person who is paid for time spent providing permit consulting services.

Currently, 107 permit consultants are registered with the city, with 87 of those registered consultants representing only one client, city data shows.

In recent years, corruption cases against top officials across city government have brought to light a history of favoritism and corruption that festered for years ahead of the indictments, according to a City Controller's Office report from 2021. At the ongoing scandal’s center is businessman and permit expediter Walter Wong, who pleaded guilty in 2020 to federal fraud and money laundering charges, agreeing to cooperate with prosecutors with his testimony.

READ MORE: These Are the Players in San Francisco’s Corruption Scandal

The Standard spoke to former officials and experts about permit expediters.

The process of overseeing permit expediters who don’t fall within the “consultant” category, which requires registration, can be difficult, former Ethics Commissioner Larry Bush said. A lack of transparency in the disclosure of clients or projects differentiates the permit consultants from lobbyists, who must also register.

Without the information provided in required quarterly consultant reports, Bush said, all kinds of unregulated expediter activity can occur.

“It’s not like being a lobbyist, where you have to register and disclose specifically who you are doing this with and for how much money,” Bush said. “It is all pretty much under the radar.”

Bush said he tried to pass a motion within the commission to require that information be publicly disclosed because he often found former city workers wanted to profit from their experience and offer themselves as knowledgeable consultants. The motion did not pass.

Wong was found to have received preferential treatment from Tom Hui, Department of Building Inspection’s former director, who had the opportunity to override the department’s control for Wong’s projects by “expediting permits and inspections and overlooking otherwise problematic issues in permitting and inspections,” the city controller’s report found.

Hui stepped down from the position in 2020.

In 2021, Wong and his companies, W. Wong Construction Co. Inc., Green Source Trading LLC and Alternate Choice LLC, were barred from doing business with the city for five years, the maximum permitted by law.

Although Wong is barred from doing business with the city, his name remains on the Ethics Commission’s website as a registered permit expediter for Jaidin Consulting Group.

According to his settlement agreement with the city, Wong received an estimated $1,291,095.26 for “goods and services provided through non-competitive contracts, purchase orders, and/or grants that were improperly approved by City officials.”

He received anywhere from $1,000 to $75,000 from different clients, filings show.

Christopher Calton, a research fellow for housing and homelessness at Oakland’s Independent Institute, called permit expediters part of a larger discretionary process of local government that often restricts economic growth.

“These are officials who have some discretionary authority and can push things through some of the bureaucratic red tape ahead of the formal processes that are so drawn out and lengthy,” Calton said. “Permit expediter is an informal term we use because of stories like this corruption scandal, but it’s not an official position. It’s a service, kind of like doing your taxes with TurboTax.”

The bigger problem, Calton said, is not the regulatory code but that anyone can request a discretionary review—a second look at a development project—that often takes up lots of time and opens the door for possible favoritism and abuses of power.

Because of this, permit expediters—although not uncommon around the country—have a unique position within the ecosystem of getting permits in San Francisco.

“It means you have to give that discretion to somebody," Calton said. "Once you do that, it is not just a matter that a permit expediter isn’t necessarily just somebody who helps someone navigate the intricacies of the law—we have that all over the country in all industries for better or worse—it’s that they then can sell their services in a roundabout way.”

Joel Umanzor can be reached at [email protected]

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