TO: Members of the City Council
FROM: Mayor Angela Birney
DEPARTMENT DIRECTOR CONTACT(S):
|
Planning and Community Development |
Carol Helland |
425-556-2107 |
DEPARTMENT STAFF:
|
Planning and Community Development |
Seraphie Allen |
Deputy Director |
|
Planning and Community Development |
Jeff Churchill |
Long Range Planning Manager |
|
Planning and Community Development |
Ian Lefcourte |
Senior Planner |
TITLE:
title
Adoption of an Ordinance Establishing an Optional Pilot Program for the 12-Year Multifamily Housing Property Tax Exemption (MFTE) Program
1. Ordinance No. 3125: An Ordinance of the City of Redmond, Washington, Amending RMC 3.38, Multifamily Housing Property Tax Exemption, Relating to Establishment of a Pilot Program for the 12 Year Exemption, Providing for Severability, and Establishing an Effective Date
OVERVIEW STATEMENT:
recommendation
Staff recommends adoption of the ordinance in Attachment A to establish an optional pilot program for the 12-year MFTE program.
The multifamily property tax exemption program is authorized in Chapter 84.14 RCW. Redmond established its MFTE program in 2017 (Ordinance No. 2892) for the purpose of encouraging the production of affordable housing. Redmond offers an 8-year and 12-year program. The 8-year program has been very successful. As of June 2023, there are six constructed and occupied market-rate projects in the 8-year MFTE program, which contain 230 affordable units. To date, no market-rate developer has used the 12-year exemption.
For the 12-year exemption, state statute requires that 20% of homes be affordable. Redmond requires this housing to be affordable between 60% and 85% of area median income. This pilot would adjust those limits to between 80% and 115% as allowed by state statute to increase uptake of the 12-year exemption and thereby increase the supply of affordable homes.
body
☒ Additional Background Information/Description of Proposal Attached
REQUESTED ACTION:
☐ Receive Information ☐ Provide Direction ☒ Approve
REQUEST RATIONALE:
• Relevant Plans/Policies:
Comprehensive Plan: policy HO-44 calls for incentive programs to increase the supply of affordable housing.
Housing Action Plan: identifies actions to complete to pursue the City’s housing goals, including updating the City’s inclusionary zoning and MFTE programs.
• Required:
Ordinances require Council approval.
• Council Request:
N/A
• Other Key Facts:
This ordinance fulfills a portion of the obligations of the Housing Action Plan Implementation (HAPI) grant contract with the Washington State Department of Commerce.
OUTCOMES:
This ordinance will allow the City to evaluate how changes to the 12-year MFTE option could increase the supply of affordable housing. At the end of the pilot program the City would have additional information to inform whether to make permanent changes to the MFTE program.
COMMUNITY/STAKEHOLDER OUTREACH AND INVOLVEMENT:
• Timeline (previous or planned):
Q4 2022 to Q2 2023.
• Outreach Methods and Results:
Stakeholder interviews.
• Feedback Summary:
Potential users of the MFTE program encouraged the City to make the program more attractive.
BUDGET IMPACT:
Total Cost:
$100,000
Approved in current biennial budget: ☒ Yes ☐ No ☐ N/A
Budget Offer Number:
0000037
Budget Priority:
Vibrant and Connected
Other budget impacts or additional costs: ☐ Yes ☐ No ☒ N/A
If yes, explain:
N/A
Funding source(s):
$100,000 grant from the Washington State Department of Commerce
Budget/Funding Constraints:
The required final deliverable of the Commerce grant is legislative action to support an adopted Housing Action Plan by June 30, 2023. Redmond’s contract with Commerce calls for ordinances amending the MFTE and inclusionary zoning programs. The 12-year MFTE pilot program fulfills the grant requirement for the MFTE ordinance. The inclusionary zoning ordinance will miss the June 30 deadline, and as a consequence Redmond will be ineligible for a portion of the grant; the specific amount is being negotiated.
☐ Additional budget details attached
COUNCIL REVIEW:
Previous Contact(s)
|
Date |
Meeting |
Requested Action |
|
3/7/2023 |
Business Meeting |
Receive Information |
|
6/13/2023 |
Committee of the Whole - Finance, Administration, and Communications |
Provide Direction |
Proposed Upcoming Contact(s)
|
Date |
Meeting |
Requested Action |
|
N/A |
None proposed at this time |
N/A |
Time Constraints:
This ordinance is a grant deliverable as noted above. Grant deliverables are due by June 30, 2023.
ANTICIPATED RESULT IF NOT APPROVED:
Redmond will not have the opportunity to assess changes to the 12-year MFTE program on a pilot basis, and Redmond will not be reimbursed for the final deliverable of the Commerce grant as described above.
ATTACHMENTS:
A. Ordinance Amending the Redmond Municipal Code
B. Issues Matrix