What’s the Difference Between Entitlements and Permits in Real Estate Development?

ASK:

I keep hearing “entitlements” and “permits” used like they’re the same thing. What’s the actual difference?

ANSWER:

If you’ve been around real estate development for more than five minutes, you’ve probably heard people use the terms entitlements and permits as if they mean the same thing. They don’t. And if you treat them as interchangeable, you could set your project back months or even kill your deal.

So, what’s the difference?

Entitlements are about “can I?”
They answer the question: Does the city (or county) allow me to do what I want on this land?

Rezoning, variances, conditional use permits
General Plan amendments
Development agreements
Planned Developments

These approvals establish the right to build what you’re proposing. Until they’re secured, your project doesn’t legally exist.

Permits are about “how do I?”
They answer the question: Do my plans meet the building and safety requirements to actually construct this project?

Building permits
Grading permits
Utility permits
Fire/life safety approvals

Permits are the more technical black and white aspect of development. They’re less about whether the city likes your idea, and more about whether it’s safe, buildable, and up to code.

Here’s where developers get into trouble: they assume once entitlements are approved, they can move straight to construction. In reality, entitlements grant you permission to build in concept. Permits grant you permission to build in practice.

At I&D Consulting, we separate these into two tracks, with clear roadmaps for each. That way, you know exactly where you are in the process and what’s coming next.

Why the Distinction Matters

Imagine this: you win a zoning change (big victory!) and your investors are celebrating. But when you submit your building permit, the fire department rejects your plans because the access road doesn’t meet their turning radius requirements.

Now you’re back in design, spending money, and potentially triggering another round of approvals. What looked like a “green light” in entitlements turns into a red light in permits.

This is why we always build parallel paths for entitlements and permits:

Entitlements = politics + land use approvals
Permits = technical + safety approvals

When you track them separately, you can plan financing, tenant commitments, and construction starts with far more accuracy.

How We Approach It at I&D

Our operating system for development projects maps both paths clearly:

Entitlement Path Mapping: every required hearing, sign-off, and staff review
Permit Milestone Schedule: every technical drawing, submittal, and recheck timeline
Stakeholder Ownership: assigning who owns which approvals (architect, engineer, city staff)
Risk Flags: where delays usually happen, so you can get ahead of them

This isn’t about overcomplicating. It’s about protecting your capital and credibility. When you know what’s coming, you avoid surprises, and keep your project alive.

KEY TAKEAWAYS:

Entitlements = land use approvals; permits = construction approvals
Entitlements ask “Can I build?” Permits answer “How do I build?”
Both are essential, and separating them prevents costly surprises
Smart developers track them in parallel so timelines stay realistic