Lakewood planning commission, staff differ on MFTE 12-year extension and RTA expansion

Lakewood, Washington — The city’s planning commission and staff presented contrasting recommendations Monday on how to use the Multifamily Tax Exemption program to spur housing in the downtown Central Business District and beyond.

The planning commission recommended a narrow change to the RTA that would add a small “blip” of parcels north of 100th Street and would remove the 12‑year extension allowance for MFTE across zones; city staff recommended expanding the CBD RTA to the full area staff mapped and keeping the longer extension option.

The distinction matters because the 12‑year MFTE extension carries additional conditions, including a 20% set‑aside for affordable units at specified area median income levels and a requirement that owners provide one month’s rent for qualifying tenants to assist relocation when the exemption expires. Planning commissioners argued the longer extension goes beyond the program’s role of incentivizing initial development and may not speed new construction, while staff said the extension can make expensive projects financeable.

Planning commission vice chair Ellen Talbo summarized public testimony as “people were very passionate about not wanting to see the boundary extended,” and commissioners said they heard repeated local concerns about the possible effect on long‑standing businesses such as the Clover Park shops. City staff emphasized that the downtown CBD already includes design standards, transit access and density bonuses that make it a natural focus for MFTE incentives.

Tiffany Spear, the city’s planning manager, described the staff analysis that led to a CBD‑focused expansion: “The CBD zone is an area designated in the comprehensive plan and the downtown sub‑area plan to welcome a significant share of increased employment as well as housing,” she said. Staff also noted the CBD’s role in maintaining the Puget Sound Regional Council urban growth center designation, which supports eligibility for regional and federal infrastructure funds.

Council members expressed a range of views. Some said they favored the planning commission’s more cautious approach — keeping incentives limited to areas already targeted and removing the 12‑year extension — while others argued the full CBD overlap would be simpler and consistent across the district. No formal council action was taken; the matter is scheduled for public hearing and future council decisions.

What was discussed (not decided): the geographic limits of the CBD RTA, whether to adopt staff’s full map or the planning commission’s smaller addition north of 100th Street, and whether the 12‑year extension should remain available in any zone. What was decided at the meeting: the council received the staff and commission reports and will take public comment at upcoming hearings before making any policy changes.

The MFTE and RTA items return to the council agenda for public hearings next month, with staff materials and the planning commission recommendation included in the packet.