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Artificial intelligence has already marked the functioning of local authorities. Community Development and IT Services are exploring areas where AI can create efficiencies in permitting, inspections and plan review. At the same time, the AI vendor landscape is growing at a pace that resembles that of past tech bubbles: rapid startup formation, overlapping products, and funding levels that currently generate no return on investment.
If the market cools, AI itself will certainly remain, but previous tech bubbles have taught us that startups often disappear. Local governments have a vested interest in keeping pace with AI adoption, but choosing proven partners that offer stability, public sector expertise, and deep workflow knowledge will protect their investment for years to come.
AI ADOPTION IS INCREASING, BUT THE IMPACT IS NOT FOLLOWING
For all its hype, the practical results of AI do not yet meet its vision. Recent Mr.Research from the Assachusetts Institute of Technology (MIT) shows a marked gap between interest in AI and measurable results; despite $30-40 billion in enterprise AI investments, 95% of organizations report no measurable return on their initiatives.
Local governments must take into account that most startups do not reach the production stage; current figures show that only 5% of task-specific AI tools make it to successful deployment.
However, this should not deter local governments from investing in AI. Rather, it is important to determine where, how and with whom, so that your investment is worthy of the result. In the area of permits and plan review, the market is still maturing. We are at the beginning of this exciting AI journey, but exploring with a proven guide is always safest.
WHY SUPPLIER INSTABILITY CREATES A REAL RISK FOR LOCAL GOVERNMENT
AI tools learn from your processes, documents, and code interpretations. When a vendor disappears, accompanied by a loss of financial investment and access to software, you lose accumulated context, face workflow disruptions, and even hinder service delivery to citizens.
Abandoned drivers cause service delays.
Implementing technology in the public sector takes time. If a vendor exits the market, agencies may have to restart purchases, retrain staff, or transition mid-project, which would significantly slow down permitting and increase administrative burden.
Higher switching costs compound over time.
After investing time and money to train AI tools for local workflows, it becomes much harder and more expensive to replace them. Switching costs add up, so it’s important to choose the right supplier from the start.
Fragmentation as providers consolidate.
Proven solutions ensure AI is integrated into a protected and stable business with a strong delivery track record. Agencies that select unproven vendors risk ending up with unsupported tools after acquisitions or strategic changes. Procurement managers often ignore proposals from AI startups due to uncertainty over supplier longevity.
FOR STABLE AND EFFECTIVE AI ADOPTION, KEEP IN MIND THAT:
1. Vendors that integrate directly into existing workflows are the most beneficial.
Look for systems that streamline workflows without creating new data silos. Sellers must demonstrate:
- Existing, reliable and proven government partnerships
- Strong understanding of operational workflows
- Minimal disruption to current systems
- Clear data boundaries and APIs for integration
- A robust roadmap for AI
For plan review, that means AI that can interpret sheets, classify documents, and support multiple departments, without requiring staff to learn new or disconnected systems.
2. External partnerships outperform internal constructions.
Among 52 organizations, MIT found that AI projects built with external partners were twice as likely to be deployed (~67% vs. ~33%). These tools have also seen greater employee adoption.
For local governments, this reinforces the value of selecting suppliers with public sector experience and the resources, partnerships and expertise to maintain and support long-term product development.
3. To get the best ROI, look for AI that streamlines front and back office workflows.
While AI budgets often focus on front-office use cases to facilitate citizen services, significant savings and ROI can be realized in operations and administrative tasks.
Plan review is well positioned to support both the front and back office. AI can act as a “front door” control to improve the quality of submissions, as well as to perform back-office administrative controls on submissions to minimize resubmissions and expedite approvals.
A PRACTICAL FRAMEWORK FOR BUBBLE-RESILIENT AI INVESTMENT
Local governments can adopt AI with confidence by applying a workflow-driven assessment framework.
1. Select suppliers with demonstrated stability in the public sector.
Choose suppliers that have proven long-term sustainability:
- Large and active government clientele
- High year-over-year retention
- Live deployments over several years
Move forward supports more than 350 agencies, serves more than 160 million residents and maintains a 99% retention rate, a strong indicator of long-term reliability.
2. Choose to use case-specific AI.
General document AI tools may work well in demos, but often fail in production. AI in very specific use cases works best; 95% of integrated task-specific AI tools fail due to poor workflow alignment.
3. Emphasize system integration and data continuity.
To ensure meaningful adoption and avoid costly change, plan review AI should include:
- Integration with permitting and plan review systems
- GIS alignment
- Strong authentication and security
- Clear data ownership and exportability
Avolve’s platform is built on Microsoft Azure AI and integrates directly with Esri ArcGIS.
4. Maintain human oversight with transparent governance.
For high-stakes work, users prefer humans by a ratio of 9 to 1. AI should support – not replace – expert judgment.
Look for systems that offer:
- Auditable logs
- Actions controlled by evaluators
- Clear guardrails
- Transparent explanations
5. Align investments with measurable operational results.
Define KPIs before implementing AI to ensure value and benchmark vendor performance. Relevant plan review actions include:
- Acceptance of first submission
- Average submission cycles
- Reduction of delays in permits
FORWARD WITH CONFIDENCE
AI will continue to transform plan review and community development. The question is not whether to adopt AI, but which vendors will be able to support agencies long after the current surge in market activity has subsided.
Agencies that prioritize public sector experience, workflow alignment, systems integration and transparent governance will modernize securely, sustainably and with confidence.