Sumner opens public hearing on proposed changes to multifamily tax-exemption program

Sumner Mayor Hayden opened a public hearing Monday on Ordinance 29-22, which would amend the city’s multifamily tax-exemption (MFTE) rules (SMC 3.52) to expand eligibility in the East Sumner neighborhood and limit the town-center exemption to projects that include affordable units.

Ryan Windisch, economic and community development director, told the council the MFTE exempts taxes on the increase in assessed value for improvements and said Sumner currently offers an eight-year exemption for market-rate projects and a 12-year exemption for projects that reserve at least 20% of units for low- and moderate-income households. Windisch said Ordinance 29-22 would expand the East Sumner boundary — where only the 12-year affordable option would be allowed — and remove the eight-year market-rate exemption from the town center so the MFTE there applies only to affordable projects.

Windisch outlined recent local projects that used MFTE benefits: Sumner Mill Apartments (62 units, 33 designated affordable under the 12-year option), Riverfront Apartments (about 20–27 units, approved for an 8-year market-rate exemption), and Kinkade Apartments (about 80 units, applied for an 8-year market-rate exemption). He also warned that exemptions reduce tax revenue on the improvement value and that the lost revenue can either shift to other nonexempt properties or reduce total revenues, sometimes affecting other taxing districts such as schools, libraries and fire districts. He noted exempt projects still pay fees such as building permits, impact fees and real estate excise tax.

Two members of the public spoke. Resident Randall Adams warned that lost property tax revenue can create additional infrastructure costs — traffic impacts, for example — that the city must still serve. Adams asked for clarification about the town-center change; Windisch confirmed developers would only receive the exemption if they provide the affordable units required by the 12-year option. Resident Randall Adams’s comments and a later question confirmed there was no developer currently requesting MFTE for a large development across from the YMCA; Windisch said that market-rate developer elected not to seek an exemption and will be fully taxed.

Council members asked technical questions about income bands and qualifying levels; Windisch said the MFTE requires rentals be offered to low- and moderate-income households and gave Sumner’s median household income ($83,285) and illustrative 80% and 60% AMI figures that correspond roughly to $66,600 and about $49,000 respectively.

The hearing was closed at 6:20 p.m. Windisch and Mayor Hayden said formal action on Ordinance 29-22 is scheduled for the council’s March 17 meeting.