The Seattle City Council approved Ordinance 127187 on March 4, 2025, amending the Multifamily Housing Property Tax Exemption (MFTE) Program codified in Seattle Municipal Code Chapter 5.73. The ordinance extends the program’s sunset date from March 31 to September 10, 2025, allowing continued application submissions and program activity. It authorizes an additional 12-year tax exemption period (up to 24 years total) for properties with exemptions expiring at the end of 2025, contingent upon adherence to stricter affordability requirements. Additionally, the ordinance enables partial property tax exemptions for commercial-to-residential conversion projects under SB 6175. It introduces rent and income limits based on unit type and occupancy, aiming to deepen affordability: for example, studio units must be affordable at 50% AMI, one-bedrooms at 60% AMI, and two-bedrooms at 75% AMI under the extension. The legislation streamlines administrative processes for property owners and includes provisions to stabilize tenant rents during transitions to new affordability limits. The ordinance reflects findings from a University of Washington study and broader policy goals of promoting equitable housing access, mitigating displacement, and increasing affordable housing options throughout Seattle.
This decision extends a key affordable housing incentive for developers, ensuring continuity in tax-exempt programs while encouraging deeper affordability and adaptive reuse of commercial properties. It supports the city’s efforts to address housing shortages and tenant stability amid shifting market conditions.