Residents and businesses press Lakewood council over proposed multifamily tax-exemption expansion

Lakewood — Planning staff held a public hearing May 19 before the Lakewood City Council on a proposal to expand the city’s Multifamily Tax Exemption (MFTE) residential target area (RTA) so it aligns with the Central Business District, with formal consideration scheduled for the council’s June 2 meeting.

The issue drew a large turnout of residents and business owners who said the tax break — a 12‑year exemption available under state law — would encourage dense apartment development that threatens the character of Gravelly Lake Drive and nearby historic shops, reduce tax revenue and put mature Garry oak trees at risk.

The MFTE program is authorized under the Revised Code of Washington (RCW) and is intended to encourage housing production in close‑in areas. Planning staff member Jeff Remack summarized the staff proposal at the hearing as including an RTA expansion and code clarifications about application timing.

"Three primary items when we look at that: one is the expansion of the proposed RTA, the proposed extension for 12 year allowed extension that can be done per the RCW," Remack told the council.

Opponents said the proposal would reward developers while harming small, long‑standing local businesses. Christina Manetti, who identified herself with the Gary Oak Coalition, urged the council not to approve incentives for the block between Gravelly Lake Drive and Silicon Boulevard.

"The tax incentives would encourage types of development there that are inappropriate for that area," Manetti said. "These trees, even 400 years old or maybe even more, need to be considered first when planning in Lakewood."

Several business owners and merchants who operate in the Clover Park Shops and along Gravelly Lake Drive said they would be displaced if property owners sell to developers. Karen Burns, who identified herself as a Clover Park Shops business owner, described the personal impact.

"If my building were to be torn down, ...there's no way I could stay open," Burns said. "The tax incentives…you have no way to cover that except for us."

A smaller group of speakers urged the council to approve the expansion. Architect James Guerrero described a statewide housing shortfall and said the Central Business District is a logical place to concentrate new units.

"We have a housing problem," Guerrero said. "If we don't take this development in, we're effectively saying it's not for us. You make that happen somewhere else."

Council members and staff repeatedly noted that the hearing is part of a multi‑step legislative process. The planning commission provided recommendations earlier in the review; planning staff said public comments received at the hearing and in writing will be considered before the council votes on an ordinance on June 2.

Actions and next steps

No ordinance was adopted at the May 19 hearing. The council will consider action on the MFTE/RTA proposal at its June 2 meeting; written testimony received before tonight’s meeting was entered into the record. Planning staff identified the RCW authority for the MFTE program and said the proposed 12‑year exemption would be applied according to code language staff will bring back with the ordinance.

Discussion vs. decision

Discussion: public testimony focused on environment and neighborhood character, fiscal effects and the code mechanics for applying MFTE. Direction/assignment: staff will compile and evaluate written and oral testimony and incorporate it into the June 2 ordinance packet. Formal decision: none this evening.

Why this matters

If adopted, the expansion would give developers a multi‑year property tax exemption on qualifying multifamily buildings in the targeted downtown area. Opponents said the exemption would shift revenue burdens, remove longtime businesses, and risk loss of mature street trees and local character. Supporters said incentives are needed to attract housing supply to areas with services and transit.

Public input and evidence

The council received dozens of in‑person and virtual public comments at the May 19 hearing and a set of earlier written comments submitted in advance. Staff said the body will consider all comments before a planned vote on June 2.