Committee backs short extension of Seattle MFTE program and 12‑year renewal option for expiring properties

The Seattle City Council Housing and Human Services Committee voted Feb. 26 to recommend passage of Council Bill 1200943, legislation to amend the multifamily tax exemption (MFTE) program, extend the program sunset date and allow certain buildings with MFTE expiring in 2025 to receive an additional 12‑year tax exemption.

The committee voted 4–0 to forward the bill to the March 4 full City Council meeting. Chair Kathy Moore moved the passage recommendation; the motion was seconded and approved on a roll call of Council President Nelson (aye), Council Member Rink (yes), Council Member Saka (aye) and Chair Moore (aye).

Office of Housing Director Michael Winkler Chin, accompanied by Kelly Larson and Tracy Ratliff, presented the proposed changes, described in the legislation as “P 6.7.” The presentation summarized three main components: (1) moving the MFTE program sunset date from March 31, 2025, to Sept. 10, 2025; (2) allowing properties with MFTE expiring in 2025 to opt into an additional 12‑year exemption (for a total of 24 years) under lower rent limits; and (3) aligning local rules with state law enacted in February 2024 (Senate Bill 6175) to streamline office‑to‑residential conversions.

Winkler Chin said the MFTE program provides a 12‑year property tax exemption in exchange for setting aside 20–25% of units for income‑qualified renters and that program P6 has been reauthorized multiple times since 1998. The office identified 18 buildings with a total of 405 restricted MFTE units that would be eligible to seek the 12‑year extension under the proposed policy. The presentation noted those buildings are generally about 12 years old and that the extension would require owners who elect the extension to reduce rents to the P6.7 extension rent limits beginning Jan. 1, 2026; tenants whose incomes exceed 1.5 times the new income limit may retain existing rents until turnover.

The presenters said administrative simplifications have already been implemented, including allowing third‑party income verification, discontinuing requests for certain proprietary payment records, allowing graduate students to be eligible, and accepting digital signatures. The office also noted it will continue work toward a broader P7 reauthorization and pointed committee members to a University of Washington report posted on the Office of Housing website as a major analytical input.

Council members asked for timing and process details. Council Member Saka pressed for a firm timeline and said the council needs legislation in early summer to allow meaningful committee review before the proposed Sept. 10 sunset. Office staff said they aim for a June transmission and July committee consideration to allow time before the extension deadline. Council President Nelson and other members emphasized balancing stronger affordability requirements with maintaining developer participation and urged continued outreach to the development community and renters.

The committee recommendation to pass Council Bill 1200943 will be transmitted to the March 4 City Council meeting.