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Development Services audit: third-party plan review used by 19% of residential permits, commercial use low; staffing limited audits
Summary
Development Services reported third-party review use and audit findings for June 1, 2024–June 1, 2025: roughly 19% of residential permits used third-party review and 1% of commercial permits did; only a small number of audits were completed because of staff shortages.
Daniel King, Engineering Services Manager for Development Services, presented the department’s audit of the optional third-party plan-review program implemented under AO 2023-136. The audit period ran from June 1, 2024, to June 1, 2025.
King told the committee there were roughly 700 commercial permits in the audit period (new buildings, alterations and additions) and eight of those—about 1%—used third-party review. For residential permits the department counted nearly 900 permits in the same period and found around 19% used third-party review; 62% of new residential buildings had third-party structural review and a large share of residential third-party reviews focused on structural discipline.
The department completed only three of the required commercial audits during the period, citing staffing shortages: two structural reviewers had retired and the department was short-staffed while hiring replacements. Of the audited items presented, King reported two passes, two corrections and two failures (examples cited included missing fire separation between dwelling units and missing insulation installation details that would have required redesign). The department said additional cases were awaiting third-party reviewer responses at audit close.
King told the committee that third-party review in Anchorage differs from some other jurisdictions because third-party reviewers are often hired by the project owner or contractor rather than being independent, municipality-contracted reviewers. That can create conflicts of interest, he said, and it also creates market incentives for reviewers to issue quick reviews with minimal comments to retain repeat work. He recommended continued oversight, improved audit capacity and controls on third-party reviewers.
Committee members discussed options: let the commercial expansion sunset as written, extend or modify the program with added safeguards, or adopt different review models used elsewhere. Development Services said it expects to be fully staffed by November/December, which it said would allow for a 10% audit target for the next reporting period. No legislative action was taken at the committee meeting; the item will return to committee for additional information and possible ordinance action.
