Staff say multifamily tax exemption would shift only cents per homeowner; commission seeks clarity on homeownership use

City housing staff returned June 16 for a second briefing on the multifamily tax exemption (MfTE), walking commissioners through updated estimates and how the proposed ordinance changes could be used.

Frank Hong, housing policy development lead, told the commission that, based on current program assumptions, each additional unit under the proposed MfTE translates to roughly two cents in annual tax shift; across the range of projected activity (15 to 100 units a year) a typical single‑family homeowner’s share was estimated between about $0.30 and $2 per year. He said the program has created roughly 3,700 units over its 27‑year history and that cancellations for noncompliance have been rare.

Hong addressed a recurring concern about whether MfTE incentives could be used to promote homeownership. He said that historically the program has been used mostly for rental housing, and that where housing projects under MfTE were used for ownership (notably in Seattle), they were typically by Habitat for Humanity or community land trusts — about 10 projects totaling roughly 147 units — rather than private developers. The proposed changes in the draft ordinance include lowering the minimum project eligibility threshold from 16 units to 4 and expanding applicability to certain additional zones to reflect recent state middle‑housing changes.

Commissioners asked about deed‑restriction enforcement under the 12‑year exemption and whether cancellations had occurred; Hong said cancellations are uncommon and that the department typically works with property owners to resolve compliance issues before initiating cancellation.

What’s next: Commissioners did not take formal action; staff invited further questions and will continue refining ordinance language and supporting data ahead of subsequent meetings.