Earlier this year, I laid out 5 permitting strategies for contractors to brace for a possible Fed rate cut in 2025 in this article "5 Construction Permitting Strategies to Prepare for a Possible Fed Rate Cut in 2025".

Now that the Fed has finally delivered cutting rates by 25 basis points (bps), I thought it would be a good time to assess how the construction landscape can shift. In this article, I’ll share my thoughts on what the rate cut means for major capital projects and the impact on permitting and provide practical tips to maneuver wisely through permitting in this evolving environment.

Top economists from the Greater Houston Partnership often indicate that while rate cuts may be in the right direction to support the economy, the truth is that Fed rate cuts have a lag effect. If you’re in the bond market, then you’ll see a quick impact that is usually within a couple of weeks. For contractors and developers, the change in rate can take 6 to 18 months to trickle down.

Even though 25bps may be considered as not enough the write home about, what I have observed in prior economic cycles is that construction projects that had been placed on the back of the shelf by developers or project owners can now be dusted off (depending on project pro formas) and moved to the edge to be ready to go into design or permitting or into construction.

Why is this? Because 25bps is a signal to many industry experts like Forbes indicate that this is the beginning of a cycle of the Fed lowering rates. And while tariffs remain an issue, lower interest rates are mildly boosting confidence to move forward with certain construction projects.

Then the next challenge to tackle is speed to market which brings in permitting, inspections and Certificate of Occupancy (CO). Below are five tips to assist architects, project owners and contractors with permitting due to a shift in construction project financials.

1. Start Early: Often times there is an uptick in the workload in jurisdictions as projects that were already designed are pushed into permitting. Check with your local jurisdiction.
2. Hold Predevelopment Meetings: Putting your project on the jurisdiction’s radar helps to mitigate unnecessary delays, minimize confusion about project scope and to identify any changes with permitting ordinances and amendments that could derail your project.
3. Punt Making Assumptions: Assuming that the jurisdiction is using the latest building codes or that the design team has fully covered are mistakes that can impact permitting and your construction schedule.
4. Respond to Comments Timely: Read plan review comments when issued and if you have any questions, ask the Plan Reviewer to clarify or request a meeting.
5. Phase Projects to Start Construction Sooner: Phasing projects save time and knowing how scopes can be packaged for permitting is key for getting started and assists in completing construction on time.

That’s it for now. As the economy continues to shift with the Fed cutting rates, I will chime in from time to time to offer insights into obtaining permits in a timely manner so your client’s project can start sooner.

Reach out to PermitUsNow, or call 1.844.PERMIT.4 with questions on permitting. We’re here to help. #BuildSafe