SEATTLE — A recently released audit shows the city of Seattle missed a $3.4 million payment from a developer of Insignia condominiums, a payment that was meant to fund affordable housing in the city.
"Thankfully, we were able to go back and collect it with interest, but that's a number of years we could have been using that money to build affordable housing," said Mike O'Brien, a Seattle city councilmember.
O’Brien called for this audit, which showed that the builders of Insignia, Bosa Development, were the only one of 39 developers who missed the payment.
Bosa Development did not return a call for comment Friday, and a corporate voicemail said they were closed for the Easter holiday.
The audit showed that 22 developers opted to build affordable units on-site, rather than pay the fee. Two more developers built the required affordable units off-site.
That type of exchange was part of a program called Incentive Zoning, which was voluntary.
After Mayor Ed Murray called together various stakeholders to come up with a new plan, the affordable housing portion of Incentive Zoning will now be replaced by Mandatory Housing Affordability, or MHA. As the title suggests, that program is mandatory and will apply to neighborhoods across the city.
On Friday, Murray signed a bill implementing MHA in the South Lake Union and Belltown neighborhoods. He said this program would help to ensure that a mistake such as the one made with Insignia doesn't happen again.
“To make sure that affordable housing is happening, we’re increasing both our auditing and inspecting,” he said.
City staff told KIRO 7 more positions would be added to help with oversight. They also said the person responsible for reviewing Insignia was out on extended medical leave at the time, and the person filling in did not have detailed notes about the developers’ lack of payment.
"We need to have the robust controls in place, and the transparency so everyone in the community knows what's happening and where it's happening," O'Brien said.
Steve Walker, the director of Seattle’s Office of Housing, said the culture of receiving payments from developers will also shift, as the practice goes from voluntary to mandatory.
His office, and the Seattle Department of Construction and Inspection, will soon also be able to view permits through the same software, so that multiple departments can track what’s happening in the permit process.
Murray also spoke Friday about implementing MHA next in the Chinatown International District, where developers would be required to maintain 7 percent of units at below-market rents. They can also opt to pay a fee for the city to build affordable housing.
The cost of a rent-restricted two-bedroom apartment for a family of three earning about $49,000 would be $1,219.