MFTE Program Updates

Updating our state’s multi-family property tax exemption (MFTE) program was one of the 2021 legislative priorities for both Tacoma/Pierce County Habitat for Humanity and Habitat for Humanity of Washington State. After years of running into legislative obstacles in passing a program update, this session saw a much-needed breakthrough thanks to the collaborative work of more than 50 stakeholders.

SB 5287 culminates this multi-year effort to extend and expands Washington State’s multi-family tax exemption program. The MFTE is recognized as one of the most effective and powerful tools at the disposal of local government in promoting and incentivizing housing development that increases urban density, is located near transit, and is affordable.

Updating the MFTE has been a heavily contested issue, and it took impressive legislative leadership from Sen. Mona Das (47–Kent) and Rep. Alex Ramel (40–Bellingham) along with the support of the noted coalition.

A few highlights from SB 5287:

• Creates a 20-year program for non-profit organizations that create permanently affordable homes
• Creates a pilot project in the City of Shoreline that requires renting at least 20% of units as affordable to low-income households for at least 99 years if the property is within one- mile of high capacity transit
• Amended the definition of “multiple-unit building” to include a greater variety of missing middle type housing
• Allows Pierce County to utilize the MFTE program in areas previously unable to access the tool
• Continues the 12-year program, reserving a minimum of 20% of units for low- and moderate-income households and allows a 12-year property tax exemption extension for developments continuing to meet affordable unit minimums
• Provides smaller cities limited access to the MFTE program for the first time
• Adds new tenant protections for families in income-restricted units
• Enhances accountability measures to ensure transparency and meet the legislative intent
• Continues the eight-year program and provides flexibility to help incentivize more dense, urban development, and allows a 12 year property tax exemption extension if a property rents or sells 20% of units to low- and moderate-income households

This housing policy represents countless hours of constructive negotiations among dedicated stakeholders and we are excited to put this policy to work across Pierce County.

Thank you to all the friends of Habitat who signed in “pro” on SB 5287 and submitted written testimony in favor of the bill. Your advocacy makes a difference!

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