What Fewer Permits Really Mean

If you only looked at the headline numbers, you might think housing is finally on the mend.

According to the latest Building Permits Survey, 2024 ended with single family permits up about 6.6 percent compared to 2023. Multifamily permits, though, fell 18.8 percent, and overall permits were down 2.6 percent for the year.

At the same time, most analysts agree the United States is still short several million homes. Some estimates put the gap around 3.7 to 4.7 million units.

So on one side you have fewer projects entering the pipeline. On the other side you have families who still need a place to live. That tension is where everyone in this industry is working right now.

What it feels like from the builder side

I came up as a builder. I know what it feels like when the numbers on the spreadsheet and the reality on the ground refuse to line up.

Interest rates move. Material prices move. Labor moves. Then you look at the permit data and see that multifamily is slowing at the exact time when renters and first time buyers need more options, not fewer.

On the builder side, that creates a kind of double squeeze. You still have demand, but you are more cautious about starting the next project. You have capital partners asking harder questions. You are trying to read the tea leaves on policy, zoning, and city capacity.

In that environment, every week of delay in the permit process hurts a lot more.

What it feels like from the architect side

On the architect side, the story is different but related.

Your teams are still busy. You are juggling single family, small infill, maybe some missing middle or mixed use. You see the same headlines about shortages and affordability, and you want to be part of the solution.

Then you look at your own process. How much time is getting eaten by coordination issues. How many hours go into tracking changes between structural, MEP, and energy. How many comments are really about missing information, not about the big questions of design.

When the macro picture is this tight, those “small” frictions become the difference between a project that moves and one that stalls.

Cities are in the middle

Cities sit right in the middle of this conflict. They are under enormous pressure to deliver more housing, but they are also dealing with limited staff, changing codes, and political scrutiny.

The Housing Affordability Institute called 2024 a “tale of two housing markets.” That feels right from a city perspective too.

One file on the desk is a clean, coordinated set that answers the basic questions up front. Another file is a stack of PDFs that do not match, with missing calculations and open questions about load paths or energy compliance.

Guess which one moves faster.

What we can control

None of us controls the federal funds rate. We do not control national housing policy. We do not control how many units a city can entitle in a year.

What we do control is the quality of the submittal.

For me, that is the heart of why we are building Spacial the way we are. Our focus is narrow on purpose. We pair AI agents with licensed structural, MEP, and energy engineers to do one thing well. Help get residential projects to permit with fewer surprises and less rework.

That starts long before anything is uploaded to a city portal.

• AI parses the architectural model and checks that loads, spans, and basic assumptions line up with code and with how we actually build.

• It compares structural, MEP, and energy requirements so we catch obvious conflicts before they turn into red lines.

• It surfaces the missing pieces that usually get called out by plan review. The shear wall that quietly went missing. The lateral load path that does not close. The energy calc that will trigger a comment if we ignore it.

Then our engineers make the call. They are the ones who stamp, and they are accountable for the final set. The AI’s job is to do the spotting so the humans can do the engineering.

Why this matters in a tight market

In a healthy market with plenty of supply, you might be able to absorb a clumsy approval process. Someone eats a month of delay, and life goes on.

That is not the world we are living in.

When the country is short millions of homes and permits are drifting down instead of up, every lost week has a cost. A family renews another lease. A small infill project no longer pencils. A builder shifts capital to something safer but less useful.

We are not going to fix the housing shortage by ourselves. But I do believe that if more projects showed up with clean, coordinated, code ready sets, we would see a real difference in how many homes actually get built.

Fewer resubmittals. Less back and forth. More predictable schedules for everyone in the chain.

The tension is the opportunity

Permits are down. Demand is not. That is frustrating, but it is also where the opportunity lives.

For architects, there is a chance to be the partner who is known for sending in tight, buildable sets that respect the reviewer’s time. For builders, there is a chance to move faster on the projects that do pencil, because the engineering is not the bottleneck. For cities, there is a chance to approve more housing without burning out staff.

At Spacial, that is the space we are trying to work in. One permit set at a time, one less surprise at a time.

If you are feeling this same tension in your own work, I would love to hear how you are handling it and what you wish the permit process looked like from your side of the table.