Labor and housing advocates gathered with city council members Mike O'Brien and Kshama Sawant Tuesday to declare victory on one piece of their challenge to the massive Hedreen hotel project in downtown Seattle.

The war over the 1,600-room convention hotel is far from over, but Tuesday was about celebrating one specific battle. The crux of that battle: How much should the development company have to pay the city to help account for the affordable housing it will displace with the project?

R.C. Hedreen Company, the developer behind the project, is using the city's incentive zoning program. Under that program, if developers want to build bigger buildings, they've got to either set aside some units as affordable housing or kick in some money to the city's affordable housing fund. That money then goes to nonprofits that build affordable housing. How much developers pay depends on a complex set of factors related to the size of the lots they're building on and how they're zoned, and the decision is made by the city's Department of Planning and Development.

In this case, DPD did its number-crunching and gave Hedreen its bill for the affordable housing fund: $9 million. But the details of how much Hedreen was paying raised red flags for Unite Here Local 8 and housing advocates, who were reviewing documents and city e-mails related to the project. After the group asked for a review of the calculations, DPD changed the way it was calculating Hedreen's fees and put the developer on the hook for $3 million more.

In other words, if a bunch of union and housing activists hadn't been following the project and filing public records requests, chances are nothing would have changed. The city likely would have allowed this big developer a shortcut on helping out with affordable housing at a time when the city is in the middle of an affordable housing crisis. (DPD hasn't yet responded to a request for comment.)

Unite Here Local 8 represents hotel workers, who both benefit from new hospitality jobs and struggle to find affordable housing in the city.

"So a hotel developer trying to circumvent the housing fund, which will then go toward housing projects that benefit our members so they can live in our city—that's a big deal for us," said Stefan Moritz, Unite Here Local 8's director of strategic affairs, after the press conference.

Insult to injury: One building on the block slated for development is currently home to shops on the ground floor and 49 units of affordable housing above. Despite the fact that the project isn't yet under construction because of an appeals process, all of the businesses on the ground floor of the building and the people who live in the Bonair Apartments above had to be out by Tuesday.

"It's always a challenge when you lose your housing," O'Brien said, "but when we have an affordable housing crisis like this and there's no where else to go, it really makes it impossible to survive in a city like Seattle... I want to make sure as a city we're doing something proactive to try to solve that problem."

In an effort to be "proactive," O'Brien is asking the city auditor to review the process by which the DPD figures out how much developers like Hedreen have to pay toward that affordable housing fund.

DPD has some "discretion" in calculating how much will be asked of developers, O'Brien explained after the press conference, and that discretion usually ends up favoring developers.

Imagine, O'Brien said, a great employee at DPD who really cares about affordable housing. "If the only people they ever interact with are developers," he said, "over years they will see the world through a developer lens. I would say that's not a flaw of that individual. That's a flaw of a poorly designed process."

Add onto that, O'Brien said, that much of DPD's enforcement of these types of things is complaint-based, so "when no one knows what's going on, there's often not that kind of oversight."

In this instance, advocates digging through documents were able to notice something was wrong. But that's not always the case.

"What dawned on me," O'Brien said, "was, 'Wow, we need to have someone like that watching every single decision.'"

To achieve that, O'Brien said he'd like the DPD employees who work with developers to be getting input from advocates, the city's Office of Housing, or the city council. (It's unclear where this process will fall in the new reorganization of planning the mayor announced last week, which will get rid of DPD altogether. I'm still waiting to hear back from the mayor's office.)

Hedreen's president David Thyer told the Seattle Times the calculations they were pushing for were based on "direction from the city." That underscores that the system used to get to these numbers needs a look.

“The union is using some of these numbers to … make it sound like we were defrauding the housing-bonus system,” Thyer told the Times.

More involvement from advocates would create a process in which, "The DPD planner who's making the decision is feeling pressure from the developer… But he’s also feeling pressure from the council, the public, the affordable housing advocates, and he has to balance those pressures as opposed to only hearing from one," O'Brien said.

The audit will start soon, but O'Brien said the auditor couldn't give him any estimate of how long it'll take other than "some months."

Yes, the audit may help us figure out how to fix what O'Brien sees as a flawed process. But will we also find out how many sweet deals for other developers have been slipping under the radar in this way? Probably not. The audit O'Brien has requested (which he said his colleagues Tim Burgess and Nick Licata also support) will look mostly at the process of deciding how much developers have to pay into the affordable housing fund. The auditor will review a "sample" of other recent projects and how much they were required to pay, but will be more focused on process than on financial details.

"This isn't an exercise in second guessing what [DPD] did," O'Brien said, adding later that "the auditor is reluctant to go in and do someone else's job for them."

Sawant blamed a "city hall that is mostly dominated by corporate interests" for the oversight.

"We have to continue to build a kind of politics in Seattle in such a way that the city departments never forget for even a single instant that they’re serving our interests, not Hedreen," she said. "Hedreen is not who should be served by the Department of Planning and Development. Working people should. The tenants of this building should have been served by them."

Compared to the city's massive affordable housing crisis, this $3 million in the Hedreen case may not seem like much. But for nonprofits that match city money with other sources of cash, it matters.

Mercedes Elizalde, a Low Income Housing Institute employee and candidate for city council, said her organization recently paired $2.4 million in city money with other funds to build the University Commons, 49 units of affordable housing for homeless young adults and low-wage workers.

"That $3 million to leverage more housing is critical," Elizalde said, "and to have it be an oversight by the department that is supposed to be leading the effort is really scary."