Council narrows MFTE expansion, removes Oak Brook RTA and adopts changes to multifamily tax exemption rules

The Lakewood City Council on June 2 adopted ordinance 8‑32, revising the city's multifamily tax exemption (MFTE) program, clarifying application procedures and changing which areas qualify as Residential Target Areas (RTAs).

Planning and public works director Michael Remack told the council the ordinance before them reflected multiple options considered by the planning commission and extensive public comment. "We're looking for the city council to discuss and finalize that ordinance regarding the decision on their residential target areas," Remack said. He described three principal choices: remove the 12‑year MFTE extension entirely, clarify the MFTE application process and approve, reject or modify proposed RTA expansions in several neighborhoods.

After an evening of amendments and public testimony, the council adopted a modified ordinance. The final ordinance removes certain extension language in the existing MFTE code sections and updates the application process; it retains a limited expansion in the Central Business District as recommended by the planning commission (a small area along Gravelly Lake Drive), approves an amended Springbrook expansion, declines the Oak Brook RTA proposal and adopts a revised, smaller Tilikum RTA footprint (adopted as “revised map 2”).

Council debate was robust and split on the question of where to allow enhanced MFTE incentives. Council member Marcela Pearson argued the tool can help attract housing appropriate for military families near Joint Base Lewis‑McChord and said developers use MFTE to bridge financing gaps. "If we get mixed use, the commercial space is still taxed, and after 8 or 12 years we start collecting taxes on the full improvements," Pearson said. Council member Kurt Bokey and others pressed for restraint in creating RTAs, saying some neighborhoods and existing manufactured‑home parks should not be included.

Two specific votes during the ordinance debate were recorded by roll call: the council approved a modified Tilikum RTA (revised map 2) on a 4‑3 vote; the council removed Oak Brook from RTA consideration and later adopted the full ordinance as amended. Council discussion also covered whether to keep or remove the 12‑year extension provision in code; the enacted ordinance strikes several extension subsections and updates application rules, per staff recommendations, so the precise long‑term availability of a 12‑year extension will be governed by the amended LMC text.

Planning staff said the ordinance will affect how future MFTE applicants apply and which parcels are eligible for a tax exemption on new residential improvements. Remack noted adopting the updated text and RTA maps is expected to alter where developers may choose to site multifamily projects and will affect tax revenues during any exemption period; property taxes on improved values will resume after the exemption period ends.

The council adopted ordinance 8‑32 as amended. Staff will file the ordinance language and updated RTA maps and implement the clarified application procedures for MFTE requests going forward.