HomeMy WebLinkAboutReg 2021-12-06 Item 5C - Ordinance - Eligibility Criteria for Mult-Family Residential Property Tax ExemptionsCOUNCIL AGENDA SYNOPSIS
Initials
Meeting Date
Prepared by
Mayor's review
Council review
11/22/21
BJM
12/6/21
BJM
ITEM INFORMATION
ITEM No.
5.C.
STAFF SPONSOR: D. SPECK AND B.MILES
ORIGINAL AGENDA DATE: 11/22/21
AGENDA ITEM TITLE Multi -Family Property Tax Exemption Program
CATEGORY ❑ Discussion
Mtg Date
Motion
Mtg Date
U Resolution
Mtg Date
® Ordinance
Mtg Date 12/6/21
Bid Award
AugtDate
® Public Hearing ❑ Other
Mtg Date 11/22121 Mtg Date
SPONSOR ❑ Council ❑ Mayor ❑ Admin Svcs ❑ DCD ❑ Finance ❑ Fire ❑ P&R ❑ Police ❑ PIP/
SPONSOR'S
SUMMARY
Revised Code of Washington 84.14 allows municipalities to provide a property tax
exemption to qualifying residential developments within their cities. The Multi -Family Tax
Exemption (MFTE) reduces the property taxes owed on a development by exempting the
value of the multi -family residential improvements over a specific period. Discussion on
the current program, including possible re -adoption in the Southcenter District and
expansion to other parts of the City.
REVIEWED BY
❑ Trans&Infrastructure Svcs ❑ Community Svcs/Safety ❑ Finance & Governance ® Planning & Community Dev.
❑ LTAC ❑ Arts Comm.
❑ Parks Comm. ❑ Planning Comm.
DATE: 11/15/21 COMMITTEE CHAIR: HOUGARDY
RECOMMENDATIONS:
SPONSOR/ADMIN. Economic Development, Mayor's Office
COMMITTEE Unanimous Approval; Forward to Committee of the Whole
COST IMPACT / FUND SOURCE
EXPENDITURE REQUIRED
So
AMOUNT BUDGETED
So
APPROPRIATION REQUIRED
$o
Fund Source: N/A
Comments: N/A
MTG. DATE RECORD OF COUNCIL ACTION
11/22/21
12/6/21
MTG. DATE ATTACHMENTS
11/22/21 Informational Memorandum dated 1/1/21
Map of Southcenter District Residential Targeted Area.
Ordinance in Draft Form
Minutes from the Planning and Community Development meeting on 11/15/21.
12/6/21 Final Ordinance
101
102
City of Tukwila
Washington
Ordinance No.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, AMENDING ORDINANCE NOS. 2462
AND 2538, AS CODIFIED AT TUKWILA MUNICIPAL CODE
SECTIONS 3.90.050 AND 3.90.060, TO AMEND ELIGIBILITY
CRITERIA AND TO ALLOW NEW APPLICATIONS FOR MULTI-
FAMILY RESIDENTIAL PROPERTY TAX EXEMPTIONS TO BE
SUBMITTED; PROVIDING FOR SEVERABILITY; AND
ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, chapter 84.14 RCW authorizes cities to provide for exemptions from ad
valorem property taxation on qualified multi -family housing developments located in
designated residential targeted areas in order to encourage more desirable, affordable,
and convenient residential units in urban centers; and
WHEREAS, the King County Countywide Planning Policies (KCCPP), developed
pursuant to the Washington State Growth Management Act, have established standards
for cities to plan for their share of regional growth and affordable housing; and
WHEREAS, the Tukwila Urban Center is one of the region's designated urban
centers and lies within an urban growth area, with access to high capacity transit; and
WHEREAS, the City intends to assist in achieving its residential growth targets and
goals in the City's Housing and Urban Center Element of the City's Comprehensive
Plan by encouraging new multi -family housing in the Tukwila Urban Center; and
WHEREAS, three projects utilized the Multi -Family Tax Exemption between 2014
and 2017, including two age -restricted projects; and
WHEREAS, the Tukwila Urban Center currently lacks sufficient available, desirable
and convenient residential housing available to all ages, including affordable housing, to
meet the needs of the public who would be likely to live and work in the urban center, if
affordable, desirable, attractive, and livable places were available; and
WHEREAS, King County is currently facing a housing shortage, with a lack of
workforce housing; and
CC:Legislative Development \Property tax exemption for qualified multi -family housing—update 11-29-21
BM:bjs Review and analysis by Barbara Saxton Page 1 of 4
103
WHEREAS, thousands of people who work in the Tukwila Urban Center are unable
to live near their jobs due to a lack of quality workforce housing and, as a result, these
individuals commute to and from work, resulting in additional vehicles on regional
roadways and adding more greenhouse gas emissions to the atmosphere; and
WHEREAS, the Tukwila Urban Center qualifies as an urban center for purposes of
RCW 84.14.010, and Tukwila has a desire to stimulate construction of new multi -family
housing within that portion of the Tukwila Urban Center's Transit Oriented Development
District that lies west of the Green River; and
WHEREAS, the tax incentive provided by chapter 84.14 RCW encourages
increased residential opportunities, including affordable housing opportunities, and will
stimulate the construction of new multi -family housing within the residential targeted
area and will benefit and promote public health, safety, and welfare by encouraging
residential development and redevelopment of that area of the City; and
WHEREAS, a limited Multi -Family Tax Exemption Program in the Tukwila Urban
Center may assist in allowing workers to live closer to their jobs; and
WHEREAS, the City's tax incentive regulations were adopted by the Tukwila City
Council in Ordinance No. 2462 on December 1, 2014, and amended by th e City Council
on May 15, 2017, by Ordinance No. 2538; and
WHEREAS, under Tukwila Municipal Code Section 3.90.060, applications for a multi-
family
ulti-
family tax exemption were no longer accepted after December 31, 2017, and the Tu kw it a
City Council desires to allow new projects to take advantage of the incentive to sti mu late
the construction of new housing open to all ages to supportthe development of affordable
and quality workforce housing within a portion of the Tukwila Urban Center Transit
Oriented Development District fora limited period of time; and
WHEREAS, on November 22, 2021, the Tukwila City Council, after giving public
notice consistentwith RCW 84.14.040, held a public hearing to consider adoption of th e
proposed ordinance;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section 1. TMC Section 3.90.050 Amended. Ordinance No. 2462 §7, as codified
at Tukwila Municipal Code (TMC) Section 3.90.050, is hereby amended to read as
follows:
3.90.050 Project Eligibility
A. To be eligible for exemption from property taxation under this chapter, the
residential units must satisfy all of the following criteria:
1. The units must be located in the residential targeted area.
2. The units must be within a residential or mixed-use structure containing at
least four dwelling units.
3. The units must have an average size of at least 500 square feet per unit.
CC:Leg islative Development \Property tax exemption for q ualified multi -family housing—update 11-29-21
BM:bjs Review and analysis by Barbara Saxton Page 2 of 4
104
4. A minimum of 15 percent of the units must be at least 900 square feet and
contain at least two bedrooms.
5. The units must be designed and used for permanent residential
occupancy made available to residents of all ages to promote workforce housing.
6. Each unit must have its own private bathroom and private kitchen.
Residential projects that utilize common kitchens and/or common bathrooms are not
eligible.
7. The entire property shall comply with all applicable zoning requirements,
land use regulations, environmental requirements, building codes and fire code
requirements, as outlined in the Tukwila Municipal Code.
8. The units must be constructed and receive a certificate of occupancy after
this ordinance takes effect
9. The units must be completed within 3 years from the date of issuance of
the conditional certificate of acceptance of tax exemption by the City, or within
authorized extension of this time limit.
B. In addition to the requirements listed in TMC Section 3.90.050 (A), residential
units that request the 12 -year property tax exemption, as permitted by TMC Section
3.90.040 (A)(2), must also satisfy the following requirements:
1. The mix and configuration of housing units (e.g., studio, one -bedroom,
two-bedroom, etc.) used to meet the requirement for affordable units under TMC
Section 3.90.050 shall be substantially proportional to the mix and configuration of the
total housing units in the project.
2. For owner -occupied projects, the contract with the City required under
TMC Section 3.90.070 shall identify which units meet the affordability criteria.
Section 2. TMC Section 3.90.060 Amended. Ordinance Nos. 2462 §8 and 2538
§1, as codified at TMC Section 3.90.060, are hereby amended as follows:
3.90.060 Application Procedure—Fee
A. The owner of property applying for exemption under this chapter shall submit
an application to the Administrator, on a form established by the Administrator. The
owner shall verify the contents of the application by oath or affirmation. The application
shall contain the following information:
1. A brief written description of the project, including phasing if applicable,
that states which units are proposed for the exemption and whether the request is for 8
or 12 years.
2. Preliminary schematic site and floor plans of the multi -family units and the
structure(s) in which they are proposed to be located.
3. A table of all units in the project listing unit number, square footage, unit
type (studio, one bedroom, etc.), and indicating those proposed for the exemption.
4. If applicable, information describing how the applicant will comply with the
affordability requirements in TMC Sections 3.90.040 and 3.90.050.
CC:Leg islative Development\Property tax exemption for qualified multi -family housing—update 11-29-21
BM:bjs Review and analysis by Barbara Saxton Page 3 of 4
105
5. A statement from the owneracknowledging the potential tax liability when
the property ceases to be eligible for exemption underthis chapter.
6. Any other information deemed necessary or useful by the Administrator.
B. At the time of application under this section, the applicant shall pay to the City
an initial application fee of $500 or as otherwise established by ordinance or resolution .
If the application is denied, the City may retain that portion of the application fee
attributable to its own administrative costs and refund the balance to the applicant.
C. The complete application shall be submitted any time before, but no later than,
the date the certificate of occupancy is issued under Title 16 of the Tukwila Municipal
Code.
D. After December 31, 2022, the City will no longer accept applications.
Section 3. Corrections by City Clerk or Code Reviser Authorized. Upon
approval of the City Attorney, the City Clerk and the code reviser are authorized to
make necessary corrections to this ordinance, including the correction of clerical errors;
references to other local, state or federal laws, codes, rules, or regulations; or ordinance
numbering and section/subsection numbering.
Section 4. Severability. If any section, subsection, paragraph, sentence, clause or
phrase of this ordinance or its application to any person or situation should be held to be
invalid or unconstitutional for any reason by a court of competent jurisdiction, such
invalidity or unconstitutionality shall not affect the validity or constitutionality of the
remaining portions of this ordinance or its application to any other person or situation.
Section 5. Effective Date. This ordinance ora summary thereof shall be published
in the official newspaper of the City, and shall take effect and be in full force five days
after passage and publication as provided by law.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of , 2021.
ATTEST/AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk
APPROVED AS TO FORM BY:
Office of the City Attorney
Allan Ekberg, Mayor
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
Ordinance Number:
CC:Legislative Development\Property tax exemption for q ualified multi -family housing—update 11-29-21
BM:bjs Review and analysis by Barbara Saxton Page 4 of 4
106