City of Lancaster Uses AI to Process Construction Permit Applications

As society moves beyond using generative AI for specific tasks and toward autonomous, agentic AI for decision-making and execution, the construction industry is likewise enjoying the operational benefits of AI. AI tools are helping industry participants to perform a broad range of tasks more quickly and efficiently, thereby reducing operational costs while improving workflow and project timelines.

One notable example is the use of AI in construction permitting. In 2024, the City of Lancaster, California, became one of the first municipalities to use an AI platform to process and issue permit applications for construction projects within city limits. The move marked a shift from traditional manual review toward automated municipal processes. Since then, the Governor of California has implemented a number of additional laws allowing the use of AI by municipalities to process permits, particularly in light of the increased need for permits resulting from homes damaged or destroyed by natural disasters.

Municipal Adoption and Early Results

While the approach drew criticism, the city reported that AI permitting helped reduced application backlogs and provided much-needed relief to an overextended staff. Rather than replacing human decision-making, the system was intended to handle routine or ministerial portions of the permitting process, allowing staff to focus on more complex reviews requiring judgment and oversight.

The project was so successful that Los Angeles County followed suit to keep pace with permit demands driven by fires and other catastrophic events. The hope is that the AI-driven acceleration of rebuilding permit approvals will help communities recover more quickly  after devastating fires.

AI as a Response to Staffing and Resource Constraints

As government shut downs and cutbacks plague all facets of the United States, the increased use of AI by municipalities to automate routine or ministerial tasks may offer a viable, efficient solution to address gaps created by an ever-shrinking workforce, allowing municipalities to focus limited resources on projects and decisions that require human oversight.

The Growing Role of AI in Construction Litigation

The construction industry’s reliance  on AI is not limited to permitting. Construction attorneys are also beginning to use AI tools  to review and manage the large volumes of documents involved in dispute resolution and litigation. Complex construction matters often include thousands of records, ranging from contracts and change orders to financial data and project communications. AI can  assist in organizing, identifying and analyzing these materials more efficiently than traditional manual review alone.

Agentic AI, in particular, can streamline the review process in complex construction disputes, helping legal teams identify relevant information more quickly and reduce time spent on repetitive tasks. The potential efficiencies are substantial, especially in large-scale matters involving multiple parties and extensive records.

Ethical and Confidentiality Considerations

Despite these benefits, the use of AI in legal practice carries significant risk. Construction litigation frequently involves sensitive financial information, confidential project details and attorney work product. One of the most immediate concerns associated with AI is the potential inadvertent disclosure.

Nearly all 50 states have adopted rules  addressing a lawyer’s duty of technological competence, which includes competence in the use of AI tools. ABA Model Rules of Professional Conduct, including Rules 1.1, 1..4, 1.6, 5.1 and 5.3, along with related state ethics rules and opinions, provide the framework for use of AI by lawyers. These  rules require lawyers to understand the technology they use and to supervise staff, consultants, third-party vendors and witnesses who use AI tools in the practice of law.

Construction practitioners should be aware of these rules as they navigate the challenges of increased use of agentic AI in the industry. Technology can improve efficiency, but it does not replace the need for professional judgment, supervision and careful protection of client information.

Key Takeaways

The use of AI to process construction permits illustrates a broader shift toward automation across both government and private sectors. For municipalities, AI offers a way to address staffing shortages and reduce administrative bottlenecks. For developers and contractors, it may mean faster project approvals and greater predictability. For construction lawyers, AI presents opportunities to manage complex data more effectively while also creating new ethical and risk management considerations.