City Council reviews multifamily housing tax exemption program to boost affordable housing

The Washougal City Council's June 7, 2025, planning session spotlighted the Multifamily Housing Tax Exemption (MFTE) program, a crucial initiative aimed at boosting affordable housing in the area. Council members engaged in a detailed discussion about the program's structure, benefits, and implications for the community.

The MFTE program, established under state law in 1995 and revised in 2007, incentivizes the development of multifamily housing by offering property tax exemptions for residential improvements. This initiative is particularly relevant as Washougal seeks to address its housing needs amid rising demand. The council reviewed various exemption options, including an 8-year exemption for market-rate housing, a 12-year exemption requiring a portion of units to be affordable, and a 20-year exemption aimed at ensuring permanent affordable homeownership through partnerships with nonprofits.

Council members expressed concerns about the tax implications of the MFTE program. While the program aims to stimulate housing development, it also shifts the tax burden to other property owners, raising questions about fairness and long-term sustainability. The discussion highlighted the need for transparency regarding how these tax shifts affect the community, particularly in terms of increased costs for existing taxpayers.

The council also examined the current status of the MFTE program, which is set to expire in June 2026 unless extended. They acknowledged the importance of adapting the program to meet evolving housing needs and the changing economic landscape. As the meeting concluded, council members emphasized the need for further discussions on how to balance the benefits of the MFTE program with its financial implications for the community.

This session underscored the city's commitment to addressing housing challenges while navigating the complexities of tax policy and community impact. The council's ongoing deliberations will be crucial in shaping the future of housing development in Washougal.