{"id":202625,"date":"2025-04-24T12:00:40","date_gmt":"2025-04-24T12:00:40","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/real-estate\/are-post-2020-permitting-woes-finally-over-what-it-means-for-developers-occupiers-and-landlords\/"},"modified":"2025-04-24T12:00:40","modified_gmt":"2025-04-24T12:00:40","slug":"are-post-2020-permitting-woes-finally-over-what-it-means-for-developers-occupiers-and-landlords","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=202625","title":{"rendered":"Are Post-2020 Permitting Woes Finally Over? What It Means for Developers, Occupiers, and Landlords"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div>\n<p>Author: <a href=\"https:\/\/vvco.com\">Gordon Lamphere<\/a> This post originally appeared on <a href=\"https:\/\/www.vvco.com\/are-post-2020-permitting-woes-finally-over-what-it-means-for-developers-occupiers-and-landlords\/\">Van Vlissingen Blog<\/a> and is republished with permission. Find out how to <a href=\"https:\/\/blog.thebrokerlist.com\/blog-with-us\/\" target=\"_blank\" rel=\"noopener\"> blog with us<\/a> on theBrokerList.<\/p>\n<p><span style=\"font-size: 14pt\">The commercial real estate industry has been navigating a turbulent permitting environment since 2020. The COVID-19 pandemic caused widespread municipal office closures, regulatory bottlenecks, and economic uncertainty, delaying projects and increasing costs. Now, as we move through 2025, the question remains: Have these permitting woes finally ended, or are developers, occupiers, and landlords still facing significant obstacles?<\/span><\/p>\n<h2>Are Post-2020 Permitting Woes Finally Over In Illinois, Wisconsin, and Indiana?<\/h2>\n<h3>Illinois: A Market Struggling to Catch Up<\/h3>\n<p><span style=\"font-size: 14pt\">Illinois has faced some of the most severe permitting delays in the country. According to <a href=\"https:\/\/upforgrowth.org\/\" target=\"_blank\" rel=\"noopener\">Up for Growth<\/a>, Illinois had <a href=\"https:\/\/www.illinoispolicy.org\/illinois-housing-least-affordable-in-midwest\/\" target=\"_blank\" rel=\"noopener\">113,000 fewer housing units than needed in 2021<\/a> alone, a direct result of regulatory backlogs and permitting inefficiencies. The state ranks among the lowest for new housing unit approvals, exacerbating affordability issues and slowing commercial development.<\/span><\/p>\n<ul data-spread=\"false\">\n<li><span style=\"font-size: 14pt\"><strong>Chicago\u2019s Challenges<\/strong>: Among the top 10 most populous U.S. cities, Chicago ranks last in average new housing units approved per capita over the past five years. In 2023, the city approved only 3,600 units\u2014the lowest number since its peak in 2016.<\/span><\/li>\n<li><span style=\"font-size: 14pt\"><strong>Economic Impact<\/strong>: A sluggish permitting process has slowed commercial development, limiting developers\u2019 ability to respond to market demand quickly.<\/span><\/li>\n<li><span style=\"font-size: 14pt\"><strong>Office and Industrial Space<\/strong>: Office permitting has been particularly slow, contributing to an oversupply of outdated spaces that cannot be repositioned efficiently. Meanwhile, industrial space demand continues to rise, but permitting bottlenecks have slowed the construction of much-needed logistics and warehouse facilities.<\/span><\/li>\n<\/ul>\n<h3>Indiana: Leading the Region in Permitting Growth<\/h3>\n<p><span style=\"font-size: 14pt\">In contrast to Illinois, Indiana has seen significant growth in permitting activity.<\/span><\/p>\n<h3>Wisconsin: A Market with Mixed Results<\/h3>\n<p><span style=\"font-size: 14pt\">Wisconsin falls somewhere between Illinois and Indiana. While the state has seen some improvements, particularly in Madison, where permitting rates have been higher than the national average, certain municipalities still experience significant delays.<\/span><\/p>\n<ul data-spread=\"false\">\n<li><span style=\"font-size: 14pt\"><strong>Madison\u2019s Permitting Boom<\/strong>: In the first half of 2024, <a href=\"https:\/\/arbor.com\/blog\/top-markets-for-multifamily-permitting-in-2024s-first-half\/\" target=\"_blank\" rel=\"noopener\">Madison issued 2,152 multifamily permits, equating to 3.1 permits per 1,000 residents<\/a>, far exceeding the national median.<\/span><\/li>\n<li><span style=\"font-size: 14pt\"><strong>Office and Industrial Space<\/strong>: While Milwaukee has made strides in revitalizing <a href=\"https:\/\/www.vvco.com\/office-space-buy-sell-lease-in-chicagoland\/\" target=\"_blank\" rel=\"noopener\">office spaces<\/a> through adaptive reuse, industrial developers continue to face zoning and approval challenges. The demand for <a href=\"https:\/\/www.vvco.com\/industrial-space-buy-sell-lease-in-chicagoland\/\" target=\"_blank\" rel=\"noopener\">industrial space<\/a> is high, but permitting timelines still lag behind Indiana.<\/span><\/li>\n<li><span style=\"font-size: 14pt\"><strong>Other Cities Lagging<\/strong>: Milwaukee and other major Wisconsin cities still face permitting challenges due to regulatory red tape and workforce shortages in municipal offices.<\/span><\/li>\n<\/ul>\n<h2>What It Means for Developers<\/h2>\n<p><span style=\"font-size: 14pt\">For developers, the permitting process can make or break a project\u2019s feasibility. The delays seen in Illinois have caused project costs to rise due to:<\/span><\/p>\n<ul data-spread=\"false\">\n<li><span style=\"font-size: 14pt\"><strong>Extended Carrying Costs<\/strong>: The longer it takes to obtain permits, the more developers must pay in holding costs for land and financing.<\/span><\/li>\n<li><span style=\"font-size: 14pt\"><strong>Regulatory Uncertainty<\/strong>: Illinois\u2019s strict regulations create unpredictable project timelines, making it difficult for developers to plan future investments.<\/span><\/li>\n<li><span style=\"font-size: 14pt\"><strong>Better Alternatives Elsewhere<\/strong>: Many developers are shifting their focus to Indiana, where the permitting process is faster and costs are lower.<\/span><\/li>\n<li><span style=\"font-size: 14pt\"><strong>Office and Industrial Impact<\/strong>: Developers looking to convert outdated office properties into mixed-use or residential projects in Illinois have struggled with prolonged permitting, while industrial developers in Wisconsin have had to navigate inconsistent zoning rules.<\/span><\/li>\n<\/ul>\n<h2>What It Means for Occupiers<\/h2>\n<p><span style=\"font-size: 14pt\">Occupiers\u2014tenants looking for commercial space\u2014are directly affected by slow permitting processes:<\/span><\/p>\n<ul data-spread=\"false\">\n<li><span style=\"font-size: 14pt\"><strong>Limited Supply<\/strong>: A lack of new development in Illinois means fewer high-quality office and <a href=\"https:\/\/www.vvco.com\/industrial-space-buy-sell-lease-in-chicagoland\/\" target=\"_blank\" rel=\"noopener\">industrial spaces<\/a> are available, driving up rental costs.<\/span><\/li>\n<li><span style=\"font-size: 14pt\"><strong>Market Imbalance<\/strong>: Wisconsin and Indiana are seeing stronger development trends, attracting businesses looking for easier permitting and lower costs.<\/span><\/li>\n<li><span style=\"font-size: 14pt\"><strong>Delayed Build-Outs<\/strong>: Even after signing leases, tenants often face months-long delays before their spaces can be occupied due to slow municipal approvals for interior renovations.<\/span><\/li>\n<li><span style=\"font-size: 14pt\"><strong>Office vs. Industrial Challenges<\/strong>: Office tenants in Illinois face limited modernized spaces due to slow redevelopment approvals, while industrial occupiers struggle with supply chain disruptions caused by a lack of new logistics facilities.<\/span><\/li>\n<\/ul>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-7375 aligncenter lazyload\" src=\"https:\/\/blog.thebrokerlist.com\/wp-content\/uploads\/2025\/03\/Developers-.jpg\" alt=\"Construction Development Developers\" width=\"812\" height=\"541\"\/><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-7375 aligncenter lazyload\" src=\"https:\/\/blog.thebrokerlist.com\/wp-content\/uploads\/2025\/03\/Developers-.jpg\" alt=\"Construction Development Developers\" width=\"812\" height=\"541\"\/><\/h2>\n<h2>What It Means for Landlords<\/h2>\n<p><span style=\"font-size: 14pt\">For landlords, permitting inefficiencies can create additional financial pressures:<\/span><\/p>\n<ul data-spread=\"false\">\n<li><span style=\"font-size: 14pt\"><strong>Higher Vacancy Rates<\/strong>: Existing landlords may benefit from increased demand in the short term if new developments are stalled. However, in the long run, slow permitting can stifle business growth and economic activity.<\/span><\/li>\n<li><span style=\"font-size: 14pt\"><strong>Uncertainty for Property Improvements<\/strong>: Renovations and tenant improvements require permits, and delays mean longer turnaround times for upgrading commercial properties.<\/span><\/li>\n<li><span style=\"font-size: 14pt\"><strong>Competitive Disadvantage<\/strong>: States like Indiana, where permitting is more efficient, are attracting tenants and investors that might have otherwise chosen Illinois or Wisconsin.<\/span><\/li>\n<li><span style=\"font-size: 14pt\"><strong>Office and Industrial Market Impact<\/strong>: Landlords in Chicago\u2019s struggling office sector are unable to quickly reposition buildings for new uses due to permitting delays, while industrial landlords in Wisconsin have an edge if they can navigate the process faster than competitors.<\/span><\/li>\n<\/ul>\n<h2>Are the Woes Finally Over?<\/h2>\n<p><span style=\"font-size: 14pt\">The answer depends on the region:<\/span><\/p>\n<ul data-spread=\"false\">\n<li><span style=\"font-size: 14pt\"><strong>Illinois<\/strong>: No. The state\u2019s permitting backlog remains a major issue for commercial real estate, with no clear solution in sight.<\/span><\/li>\n<li><span style=\"font-size: 14pt\"><strong>Indiana<\/strong>: Largely, yes. The state\u2019s permitting processes have improved, making it a more attractive destination for developers and businesses.<\/span><\/li>\n<li><span style=\"font-size: 14pt\"><strong>Wisconsin<\/strong>: Mixed. While Madison has been an outlier in efficiency, other parts of the state continue to struggle with permitting challenges.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 14pt\">Staying informed about local permitting trends is critical for developers, occupiers, and landlords. As market conditions shift, those who understand how to navigate the permitting process in their respective states will be best positioned for success.<\/span><\/p>\n<p>The post <a href=\"https:\/\/www.vvco.com\/are-post-2020-permitting-woes-finally-over-what-it-means-for-developers-occupiers-and-landlords\/\" target=\"_blank\" rel=\"noopener\">Are Post-2020 Permitting Woes Finally Over? What It Means for Developers, Occupiers, and Landlords<\/a> appeared first on <a href=\"https:\/\/www.vvco.com\" target=\"_blank\" rel=\"noopener\">Van Vlissingen and Co.<\/a>.<\/p>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Author: Gordon Lamphere This post originally appeared on Van Vlissingen Blog and is republished with permission. Find out how to blog with us on theBrokerList. The commercial real estate industry has been navigating a turbulent permitting environment since 2020. The COVID-19 pandemic caused widespread municipal office closures, regulatory bottlenecks, and economic uncertainty, delaying projects and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":202626,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[99],"tags":[18154,7385,16571,7519,77707,77706,77705,37138],"dealstore":[],"offerexpiration":[],"class_list":["post-202625","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate","tag-developers","tag-finally","tag-landlords","tag-means","tag-occupiers","tag-permitting","tag-post2020","tag-woes"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Are Post-2020 Permitting Woes Finally Over? 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