Permitting capacity, not just permitting rules, is emerging as the real constraint on how fast the United States can build semiconductor fabs, data centers, power plants and battery facilities. In Minnesota, 265 of 382 air permit applications awaiting action in February had not yet been assigned to agency staff, according to a Minnesota Chamber Foundation analysis of Minnesota Pollution Control Agency data. Those unassigned applications had been waiting a median of 1,419 days, while the full group of 382 applications in process or awaiting assignment had a median wait of 1,284 days. More than half had been in the system for over three years. In Maine, EPA's latest evaluation of the state's Title V air permitting program found that air licensing staff have been understaffed for more than three years and that the shortage "impacts all permit issuance." The state recently hired two licensing engineers, but EPA reported they were not yet sufficiently trained to handle Title V sources independently. These are different states with different systems, but they point to the same execution problem. Rewriting permitting rules may shorten a process on paper, but someone still has to review the engineering.
Industrial Construction Volume Is Testing What Permitting Agencies Can Handle
Private manufacturing construction ran at a seasonally adjusted annual rate of approximately $170.3 billion in June, according to Census Bureau data. That is down considerably from its 2024 peak, but it remains more than twice the roughly $81.3 billion annual rate recorded in June 2019. Permitting backlogs do not explain that national decline on their own; material costs, financing conditions, demand, labor availability, tariffs and utility capacity all factor in. But permitting capacity becomes more consequential when companies are choosing among competing locations for projects that can represent billions of dollars in investment. Minnesota's 2026 permitting scorecard found that only five of 38 priority Tier 2 air permits issued during 2025 met the agency's 150-day target, with 14 taking longer than a year and seven taking more than two years. The same report found that 69% of the state's 382 pending air permit applications had not been assigned to a staff member as of February. For an industrial developer, the distinction between a complicated regulatory requirement and an application simply waiting for an available permit writer may matter less than the fact that both delay construction.
Federal Permitting Staff Fell 20% to 30% From January 2025 to March 2026
The capacity question now extends into federal agencies. A June analysis by the Federation of American Scientists, using federal workforce data, found that employment in permitting-related occupations across EPA, the departments of Interior, Commerce, Energy and Agriculture, and the Nuclear Regulatory Commission fell roughly 20% to 30% between January 2025 and March 2026, depending on the position and agency, affecting environmental analysis, regulatory interpretation, scientific review, contracting and project management roles alike. That decline occurred during a broader contraction: the Government Accountability Office reported in June that the workforce across 22 major federal agencies declined by nearly 256,000 employees, or more than 11%, from December 2024 to January 2026, as roughly 378,000 employees separated from those agencies while about 127,000 were hired. The consequences will not necessarily appear immediately, since permitting depends heavily on specialized expertise. Losing an experienced environmental scientist, engineer or permit writer does not simply create one vacancy; the replacement may need months or years to develop the technical and institutional knowledge required to review complicated facilities independently, a pattern already showing up in facilities project timelines nationally. Maine illustrates the issue directly: new licensing engineers have been hired, but EPA's evaluation shows that adding headcount does not instantly recreate lost permitting capacity.
Faster Rules on Paper Have Not Yet Translated Into Faster Reviews
The current administration has made permitting speed a central regulatory priority, and momentum for federal permitting reform has been building across several fronts this year. EPA issued guidance in May allowing state, local and Tribal authorities to conduct public comment periods concurrently with EPA's review of proposed Title V permits, rather than sequentially, and clarified that its own review does not necessarily have to consume the full 45-day period the Clean Air Act allows. In April, EPA separately told permitting authorities they could streamline unchanged Title V renewals so resources could be concentrated on new permits and significant modifications. Those changes can remove procedural time, but they cannot eliminate workload. A permit that no longer requires an unnecessary administrative step can move faster once someone reviews it, and it can still sit if no qualified reviewer is available. Current permitting reform is largely discussed as a question of rules, sequencing and legal requirements, when capacity may increasingly determine whether the promised acceleration actually reaches companies building projects.
New York City's Own Building Department Shows the Same Pattern
The problem is not confined to environmental permits. A July report from New York State Comptroller Thomas DiNapoli found that staffing and budget constraints have slowed development-related work at the New York City Department of Buildings, where average time from application to approval for jobs submitted through the city's portal increased from 8.3 days in 2020 to 20.3 days in 2025, reaching 23.6 days during the first four months of fiscal 2026. DiNapoli found that inspection responsiveness had deteriorated over the same period, largely because of staffing and budget issues, and recommended additional attention to recruitment and retention in engineering, architecture and other technical positions. Individually, those extra days look manageable. Across hundreds or thousands of projects, they become construction schedules, carrying costs and delayed revenue, the same dynamic playing out in other New York permitting decisions companies are now tracking closely.
Companies evaluating industrial sites have traditionally asked what permits are required and how long those permits normally take. The better question now may be whether the agency responsible for issuing them actually has the people to process the expected workload. That means diligence should extend beyond statutory timelines to application backlogs, average assignment times, agency vacancies, turnover among technical staff, and whether a state provides dedicated project coordinators for large investments. Minnesota has already created an interagency permitting liaison intended to give businesses a central point of contact and coordinate activity across agencies, and New Jersey's Operation FAST similarly pairs recruitment and additional technical staff with procedural and technology changes. A state can offer attractive tax incentives, available land and a business-friendly regulatory structure, but if a critical permit waits months before a qualified person can begin reviewing it, that staffing constraint becomes part of the site's economics. The capacity of the permit office belongs in the investment decision, too.
