Bellevue council directs staff to craft four‑year MFTE catalyst in Houma areas with no unit cap and two‑year review

After a detailed staff presentation and extended council debate, the Bellevue City Council voted to direct staff to prepare code amendments establishing a four‑year MFTE catalyst for Houma areas outside downtown with no unit cap and to conduct a two‑year review of program outcomes.

Housing staff summarized program options, comparing the existing citywide 12‑year MFTE baseline, a 6‑year catalyst with a 1,500‑unit cap (staff‑recommended option A) and a 4‑year catalyst without a unit cap (option B). Staff said the catalyst would exempt overlapping affordability 'drop‑down' rules and could increase near‑term production but would shift some benefits toward developers and reduce the number of deeper 65% AMI units in the short term. “Under this option, we would expect to see more total units including more total affordable MFTE units, but fewer of those affordable units would be at the 65% AMI level,” staff said.

Council members and public speakers debated tradeoffs: business and housing advocates urged removing a unit cap and offering a 4‑year option to reduce financing uncertainty; some council members pressed for safeguards to prevent excessive long‑term tax shifts and for an automatic reversion to baseline rules after the sunset. Several council members expressed a preference for option B (the no‑cap, four‑year catalyst) with a two‑year look‑back to assess participation and affordability outcomes.

Council member Baragava moved — and the council seconded and approved — a direction that staff finalize amendments for a four‑year catalyst with no unit cap in Houma areas outside downtown, include vesting and covenant provisions, and prepare a two‑year look‑back report that covers housing production, affordability outcomes, foregone taxes and any offsetting revenues (for example construction sales tax). Staff said the time limit and automatic sunset will be written into the code language brought back for council consideration; any future change would require a code amendment.

Staff also committed to returning with strike‑code language, vesting provisions and a process to track and report catalyst participation should council approve the draft code at a later hearing. Council asked staff to include potential operational strategies to accelerate permitting, consider targeted incentives that could support deeper affordability, and to quantify whether construction sales tax and other revenues materially offset foregone property tax revenue.