The executive board for east King County's largest affordable housing program has approved $35,000 to hire a consultant that will review its policies and audit the 700 homeowners in its program.
A Regional Coalition for Housing (ARCH) Executive Director Lindsay Masters says the process should move quickly for selecting a consultant who can advise the agency on “best practices” in the affordable housing industry.
Masters described the initial review of homeowners as a “light touch” audit that will lead to additional scrutiny if warranted.
The decision to fund the consultant, made during the board’s monthly meeting at Redmond City Hall, followed a KING 5 investigation that revealed three condo owners at one Bellevue complex did not actually live in the affordably-priced condo units they purchased through the ARCH program.
The agency requires owners who purchase the lower priced homes to make them their primary residence. KING 5 found that two owners rented their units out for long periods of time and the other couple, high-level Washington state government administrators, lived primarily in their house in Olympia.
ARCH is the housing agency that works on behalf of 15 east King County cities, including Bellevue, Issaquah, and Redmond. The program is funding with millions of taxpayer dollars. It has administered the sale of 700 homes, and it also oversees thousands of affordably-priced rental units in its member cities.
ARCH staff has made several recommendations to the executive board to improve its processes and protect taxpayer funds.
Masters expects the consultant to recommend ways to keep down the sale prices of ARCH homes.
ARCH controls the sale price of its homes, typically for 40 years. Masters says ARCH has historically “leaned a little more toward creating equity for homeowners.” In other words, ARCH allows them to make a certain profit if they sell the house.
The downside is, the homes can lose their affordable pricing as they become more expensive with the growing equity.
Masters said ARCH allows owners to take out more equity “…compared to other long-term affordable ownership programs.” The consultant could recommend changing that.
Currently, if a home does not sell in 60 days to a low-income buyer, the property becomes available to buyers of all income levels.
Currently half of the homes on ARCH’s for sale list have passed the 60-day mark, meaning that they are available to buyers regardless of their income.
ARCH is also considering extending that 60-day low-income window to one year.