Tacoma committee weighs changes to multifamily tax-exemption program, delays vote

The City of Tacoma’s Government Performance and Finance Committee on a review of the multifamily property tax exemption program, hearing five proposed code changes and stakeholder concerns and deciding to return the item for further work rather than advance it immediately to full council.

The proposals presented would: raise the minimum project size eligible for an 8‑year exemption from four units to 20; centralize outreach and tenant‑matching through the Community Economic Development (CED) department; allow households renewing leases to remain in income‑restricted units so long as earnings do not exceed 90 percent of area median income (AMI); require units seeking an extension to rent at least 10 percent below market rate; and schedule a formal program review in 2028.

Why it matters: the multifamily tax exemption is a major tool the city uses to encourage housing production that includes income‑restricted units. Committee members, housing stakeholders and developers said rising financing costs since 2021 have changed project economics, and council members pushed staff for clearer data about who occupies exempt units, vacancy patterns and how program rules affect unit size, family housing and geographic distribution.

Kit Burns, a Tacoma resident who spoke during public comment, questioned the income standard used for “affordable,” saying he’d left the clerk a copy of…