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Sumner narrows multifamily tax exemption, expands East Sumner target area
Summary
The Sumner City Council on March 17 approved Ordinance 2922 amending Sumner Municipal Code 3.52 to restrict the multifamily tax exemption to projects that provide affordable units and to expand the program boundary in East Sumner.
The Sumner City Council on March 17 adopted Ordinance 2922, amending Sumner Municipal Code 3.52 to change how the city’s multifamily tax exemption (MFTE) is applied. The ordinance passed by voice vote, recorded 7-0.
The MFTE changes remove the eight-year market-rate exemption option in the town center and require that projects seeking the exemption provide at least 20% of units affordable to low- and moderate-income households; the ordinance also expands the residential target area in East Sumner to the full boundary of the Sumner neighborhood plan. "It's a tax exemption for development. It's an incentive, really, for developing housing and affordable housing," Economic and Community Development Director Ryan Windisch told the council during his presentation.
Why it matters: The MFTE exempts the improvement (construction) value of qualifying multifamily developments from ad valorem property taxation for multiple taxing districts for a set period (eight years for market-rate under the former code; 12 years for affordable projects). Windisch said that even with exemptions, projects continue to pay land taxes and other fees such as traffic and parks impact fees and building permits. He also said the exemption can shift some tax burden to nonexempt properties or reduce collections depending on timing of assessment.
Windisch described projects that have used the program: Sumner Mill (about 62 units, of which 33 are designated affordable), Riverfront Apartments (market-rate, eight-year exemption, under construction), and Kinkade Apartments (slated for about 80 market-rate units). He told the council the MFTE has been in place since 2019 and was expanded to East Sumner in 2022; the current ordinance responds to a policy direction in the city’s recent comprehensive plan update.
Council member Elfers, who moved adoption of the ordinance, asked whether additional projects in the pipeline would be affected. Windisch said the three projects he had listed were the only active applicants and that many market-rate developers he has contacted are not interested in the affordable option.
The council held a public hearing on March 3, and Windisch said staff received public testimony but no written comments. The ordinance text does not include an effective-date statement in the council discussion; staff did not specify an effective date during the meeting.
Votes at a glance: Motion to adopt Ordinance 2922 moved by Council member Elfers, seconded by Council member Matt Kenna; roll call recorded seven "yes" votes (passed 7-0).
