Building Effective Multifamily Property Tax Exemption Programs in Washington

The Multifamily Property Tax Exemption (MFTE) program in Washington State began in 1995 as a way to help achieve community development goals. Under the statute, cities and counties can exempt multifamily residential improvements from property taxation for up to 24 years as an incentive for new construction and rehabilitation. Longer exemptions include requirements for income-restricted housing and potentially other public benefits, and local jurisdictions are given flexibility in determining these requirements. At first, the MFTE was created to give communities a financial tool to address long-term underinvestment in urban centers. Over time, though, this program has changed so that many cities and counties now use it to help address local needs for rental and owner-occupied housing.

Recent changes by the legislature in 2021 with SB 5287 have strengthened the ability of cities and counties to build programs that can provide public benefits and address different local housing and urban revitalization needs. This bill also vastly expanded the number of communities that can take advantage of certain tax exemptions and provided an expanded role for the Washington Department of Commerce in the guidance and auditing of local programs. Although MFTE programs can be a powerful tool to promote housing goals, there have been concerns expressed by different stakeholders. For some, it is perceived that the value of the tax incentives to property owners can outweigh the benefits received by the broader public. Other critics highlight that communities may put MFTE programs in place, only to see that few if any new projects result. There are also often property tax implications that are not clearly understood or discussed. As many cities and counties are trying to find the best strategies to encourage new market-rate and income and rent-restricted housing development, it is critical to understand how the different elements of an MFTE program can help achieve housing and community development goals. This session will provide an overview of MFTE programs across the state and the lessons learned about how to build effective incentive programs. Our panel will address this from multiple perspectives. Experts that have worked to develop and manage local MFTE programs will speak from their experiences about what has made for effective programs, while a representative from the development community will talk about how the program is viewed in the private sector. There will also be a preview of the upcoming report from the Department of Commerce to the legislature about the current state of the program and recommendations for future changes.

Mary M. Reinbold AICP
Washington State Department of Commerce

Ms. Reinbold is a senior planner working on the Growth Management Services Housing Program team. She is an AICP-certified planner who earned her master's in Urban and Regional Planning at Eastern Washington University.  Her focus is on the multifamily property tax exemption (MFTE) and helping communities across the state implement and manage their MFTE programs. Ms. Reinbold also works on the transit-oriented development implementation grant program and provides technical assistance on development and zoning codes which regulate the special housing types in HB 1220 sections 3-5.  These specialty areas capitalize on her past experience working in emergency shelters, permanent supportive housing programs, and various non-profits in the Spokane area.  Ms. Reinbold also serves on the Board of Directors for the Planning Association of Washington providing educational opportunities.

Andrew Bjorn, AICP, PhD
BERK Consulting, Inc.

Andrew Bjorn is a Senior Associate at BERK with a background in urban land economics and development planning. Andrew has extensive experience in growth planning and management and has worked with clients to address complex urban and regional planning issues for projects across the western US and Canada. Andrew has a Ph.D. in Urban Planning/Urban Ecology from the University of Washington and a Master of Science in Planning and a Master of Applied Science in Civil Engineering from the University of Toronto.

Mike Stanger
A Regional Coalition for Housing (ARCH)

Mike Stanger has worked 37 years in local government, 18 as a housing planner.  Now a Senior Planner at ARCH (A Regional Coalition for Housing), a partnership of 15 local governments of east King County, he supports ARCH members in land use and tax incentive programs and long-range planning, especially housing needs analysis.  Previously, Mike was a Senior Planner/Demographer at Snohomish County and Assistant City Manager at Allen, Texas.  He has an MPA from the University of Kansas and studied urban design and planning at the University of Washington.

McKenzie Darr
The Wolff Company

McKenzie Darr is a Development Manager for The Wolff Company, a multifamily-focused real estate developer and investor. McKenzie leads due diligence, design, entitlements, and development for projects in the Northwest United States, including Washington, Oregon, Idaho, and Montana. She has been involved in the development of more than $500M of multifamily assets. McKenzie has led the MFTE application process for more than 1,000 units, including projects participating in the 8-year exemption with and without affordability and in the 12-year exemption.McKenzie holds Master of Urban Planning and Master of Science in Real Estate degrees from the University of Washington. She is the President of the University of Washington Real Estate Alumni Group and a co-chair of the NAIOP Washington Government Affairs Committee.

Jennifer LeBreque
City of Seattle Office of Housing

Jennifer LaBrecque has worked in the affordable housing and community development field for over 20 years. She has been at the Seattle Office of Housing (OH) for 11 years in a variety of roles. She is currently OH's Market Incentives, Land Use, and Sustainability Manager, overseeing policies and programs that work with the private sector to contribute toward the creation of affordable housing.

Bryan Monroe
City of Vancouver

Bryan has worked for the City of Vancouver for 26 years in a variety of roles. Initially, he was part of a current development planning team processing all manner of land use permits including shorelines, environmentally critical areas, SEPA, archaeology, historic preservation, architectural design review, and many more. At this point in his career, he has transitioned to being involved with housing-related programs through the Vancouver CDBG/HOME program, homeowner rehab loan program, and multifamily tax exemption program.