Redmond council advances 12‑year MFTE extension to consent agenda

At a July 28 study session the Redmond City Council heard staff present proposed 2026 amendments to Redmond Municipal Code 3.38 that would add a 12‑year extension option to the city’s multifamily housing property tax exemption (MFTE) in three residential targeted areas: Marymoor, Mixed Use and Overlake. Staff said the extension would be additive to existing MFTE programs and would not replace downtown, faith or neighborhood residential programs. Ian Lefkort, who led the briefing, said the exemption would begin only after a building achieves a certificate of occupancy and starts the following year.

Council members pressed staff on legal authority, the program’s fiscal impacts and pilot results. Staff told the council the state Revised Code of Washington language on a separate 20‑year transit‑oriented MFTE created ambiguity about whether cities may adopt deeper affordability requirements, and that Redmond is coordinating a trailer amendment with other jurisdictions for legislative clarification. Councilmember Pacria asked what guidance the Department of Commerce might provide; Lefkort said staff prefer to seek legislative clarification before pursuing any change that could trigger legal uncertainty. Director Carol Helen told council the city does not intend to adopt anything immediately and that the statutory deadline for some changes is 2029.

Councilmember Parsey summarized numbers that appear in the staff memo: an estimated community cost of about $45 per household per year and roughly $575,000 in foregone taxes tied to MFTE participation; staff clarified the memo’s $5,000,000 figure refers to the total community and economic development offer supporting all staff time for plan and code amendments, not a project‑specific subsidy. Lefkort also described the 2023 pilot: it required a 20% affordable‑unit set‑aside, ran for about 1.5 years and yielded two opt‑ins and two opt‑outs under volatile market conditions, which staff said suggests the tool can be chosen by developers in appropriate contexts.

On occupancy and long‑term affordability, staff said affordable units are bound by legal covenants and remain affordable for the life of the project in Redmond, unlike jurisdictions where affordability ends when the exemption expires. After discussion and questions, Council President Stewart asked for objections to sending the amendment to a forthcoming business meeting for placement on the consent agenda; there were no objections and staff said they would prepare an ordinance for the next business cycle.

The council asked staff to return with refined language and legal analysis for the ordinance and to include the packet materials and the responses already provided to council questions. The item was cleared for the consent agenda subject to the staff follow‑up.