OLYMPIA – A bill signed today by Gov. Jay Inslee extends the Multifamily Tax Exemption (MFTE) to expand affordable housing building incentives.
“Now more than ever, we need to advance solutions to our housing crisis and get – or keep – a roof over our neighbors’ heads,” said Sen. Mona Das (D-Kent), the sponsor of the bill. “This bill was a top priority for our community, and a broad coalition of local lawmakers, low-income housing advocates, associations of cities and counties, and housing developers came together to see this through.”
In Washington, where there are only 29 affordable and available rental homes for every 100 extremely low-income households according to a 2019 report, SB 5287 broadens access to housing during a critical period of economic recovery in the state.
The new law authorizes a 12-year extension of existing 8-year and 12-year MFTEs that were set to expire if they met certain affordability requirements. It also establishes a new 20-year property tax exemption for those who build permanently affordable homes. Additionally, the law expands the definition of a city for 10 years (through Dec. 31, 2031) to include those not currently eligible for the 12-year MFTE and the 20-year exemption for permanently affordable homes.
“This is a critical tool that can be used to support the development of missing middle-range housing,” said Rep. Alex Ramel (D-Bellingham), one of the bill’s champions in the House of Representatives. “Washingtonians have been advocating for real solutions to the lack of available housing in our state, and this is one way to sustainably promote the long-term development of affordable options.”
Extending the MFTE program timeline will help address the deadline for more than 7,000 currently rent-restricted units that were set to age out of the program. Without this extension, the units would shift to market-rate rents, ultimately exacerbating Washington’s shortage of affordable housing inventory.