MULTIFAMILY HOUSING PROPERTY TAX EXEMPTION PROGRAM

SEA-MC tit. 5, subtit. II, ch. 5.73

in effect

Seattle Mun. Code § 5.73.010 Purpose

5.73.010 - Purpose The purpose of this Chapter 5.73 is to: A. Increase the supply of housing for low- and moderate-income households, including workforce housing; B. Encourage more housing production through new multifamily residential construction or conversion of commercial buildings to residential housing; and C. Affirmatively further fair housing as Seattle grows. To achieve these purposes, this Chapter 5.73 provides for special valuations of eligible improvements in designated residential target areas. This Chapter 5.73 is intended to and should be interpreted and construed to comply with chapter 84.14 RCW. (Ord. 127316, § 2, 2025; Ord. 127187, § 1, 2025; Ord. 126443, § 1, 2021; Ord. 125932, § 1, 2019; Ord. 124919, § 14, 2015 [department name change and style update]; Ord. 124877, § 1, 2015; Ord. 122730, § 1, 2008; Ord. 121415, § 1, 2004.)

Seattle Mun. Code § 5.73.020 Definitions

5.73.020 - Definitions "Affordable rent" means monthly gross housing cost, which includes the contract rent, the estimate of tenant paid utilities, and any other required fees not included in the rent, the sum of which may not exceed 30 percent of the income limit according to subsection 5.73.040.B or subsection 5.73.090.C, as applicable. "Affordable sale price" means a sale price that is affordable to an eligible household, as approved by the Office of Housing according to a methodology consistent with subsection 5.73.040.C. "Assessor" means the King County Assessor. "Bedroom" means a habitable space, as defined by Chapter 2 of the Seattle Building Code, that is either a standard bedroom or alternative bedroom. 1. "Standard bedroom" means an area with four floor-to-ceiling walls with natural light and ventilation provided by a window that opens to the outside. 2. "Alternative bedroom" means an area with four walls that meets the following requirements: a. Each wall must be at least 7 feet high; b. At least two of the walls must be floor-to-ceiling; and c. No more than one wall may be comprised partly or entirely of a sliding door. "Compliance period" means the period beginning on the date of the Final Certificate and ending on the date the last annual compliance report is due according to Section 5.73.100. "Congregate sleeping room" is a sleeping room in a congregate residence as defined in Section 23.84A.006. "Conditional Certificate" means a Conditional Certificate of Tax Exemption. "Director" means the Director of the Seattle Office of Housing or any other City office, department, or agency that shall succeed to its functions with respect to this Chapter 5.73, or the Director's authorized designee. "Dwelling unit" is defined according to Section 23.84A.008. "Eligible household" means: 1. For multifamily rental housing, a household with total annual income as follows: a. Certified as a condition to initial occupancy of an MFTE unit, no greater than the income limit for the MFTE unit according to subsection 5.73.040.B.4 or subsection 5.73.090.C.5.a, as applicable; and b. According to Section 5.73.105, not exceeding 1.5 times the income limit and not exceeding 115 percent median income. 2. For permanently affordable homes, a homebuyer household with total annual income, certified as a condition to purchase an MFTE unit, no greater than the income limit for the MFTE unit according to subsection 5.73.040.C.1. "Final Certificate" means a Final Certificate of Tax Exemption. "Median income" means the annual median household income imputed for the Seattle area based on income limits published from time to time by the United States Department of Housing and Urban Development (HUD), with adjustments for household size, which for purposes of calculating rent and sale price limits shall be based on the average size of household of one person for zero-bedroom units and 1.5 persons per bedroom for other units, all as determined by the Director. "MFTE" means multifamily tax exemption. "MFTE agreement" means the standard form of agreement, prepared by the Office of Housing, between the owner or, for permanently affordable homes, a qualified non-profit organization, as grantor and the City as grantee and recorded on the title of the property, that contains the terms and conditions for the duration of the compliance period as a condition of a property tax exemption according to this Chapter 5.73. "MFTE unit" means a dwelling unit or congregate sleeping room in multifamily housing that is leased at an affordable rent to an eligible household according to subsection 5.73.040.B.4 or subsection 5.73.090.C.5.a, as applicable, or sold at an affordable sale price to an eligible household according to subsection 5.73.040.C. "Multifamily housing" means residential improvements in a multifamily housing project that is either new construction or conversion of a commercial structure, in which all units are made available to the public for permanent renter or owner occupancy, and determined eligible for a property tax exemption according to this Chapter 5.73. Multifamily housing must be either rental housing or ownership housing. "Net unit area" means square feet of total floor area bounded by the inside surface of the perimeter walls of the unit, as measured at the floor line. Net unit area includes any walls internal to the unit and excludes spaces shared by multiple units or accessible to other building tenants or homeowners. "Owner" means the owner or owners of record of the property that includes the multifamily housing. "Owner" does not include an eligible household that is a homeowner or buyer. "Permanently affordable home" means an MFTE unit that is: 1. Sold to an eligible household at an affordable sale price; 2. Built or acquired by a qualified non-profit organization; 3. Affirmatively marketed and sold to an eligible household that receives homebuyer education and counseling from a qualified non-profit organization; and 4. Subject to a 99-year ground lease or deed restriction, to be executed at initial sale and each successive sale, that provides: a. Resale restrictions designed to provide affordability for an eligible household; b. A right of first refusal for a qualified non-profit organization to purchase the home at resale; c. Refinancing and home equity line of credit approval requirements; and d. Ongoing enforcement by a qualified non-profit organization. "Project" means a multifamily housing project with a complete building permit application, identified by a current SDCI building permit number with a CN or PH suffix. "Qualified non-profit organization" means a non-profit organization that the Office of Housing determines as experienced in the development and stewardship of permanently affordable homes, including: 1. Pre-purchase, verification of income and other requirements for eligible households, affordable sale price calculations for approval by the Office of Housing, and execution of legal restrictions on the property; and 2. Post-purchase, active support for homeowners by facilitating resales, monitoring compliance with financial, owner occupancy, and other legal requirements, and clearly communicating program guidelines and restrictions. "Residential targeted area" means an area or areas designated by the City Council pursuant to Section 5.73.030. "SDCI" means the Seattle Department of Construction and Inspections. "Unit" means a unit leased to or owned by an individual or larger household for occupancy on a permanent, non-transient basis. Leases for all rental units in multifamily housing eligible for MFTE must be for a single resident household. Separate leases for each individual living in a unit are prohibited. (Ord. 127316, § 2, 2025; Ord. 127187, § 2, 2025; Ord. 127108, § 7, 2024; Ord. 126443, § 2, 2021; Ord. 126278, § 7, 2021 [cross-reference correction]; Ord. 125932, § 2, 2019; Ord. 124877, § 2, 2015; Ord. 122730, § 2, 2008; Ord. 121915, § 1, 2005; Ord. 121700, § 2, 2004; Ord. 121415, § 1, 2004.)

Seattle Mun. Code § 5.73.030 Residential targeted area—Criteria—Designation

5.73.030 - Residential targeted area—Criteria—Designation A. Following notice and public hearing as prescribed in RCW 84.14.040, the Council may designate one or more residential targeted areas upon a finding by the Council in its sole discretion that the residential targeted area meets the following criteria: 1. The residential targeted area is within an urban center, as defined by RCW 84.14.010, and determined by the Council for purposes of this Chapter 5.73 to contain the following: a. Several existing or previous business establishments that may include but are not limited to shops, offices, banks, restaurants, and governmental agencies; b. Adequate public infrastructure including streets, sidewalks, lighting, transit, domestic water, and sanitary sewer systems; and c. A mixture of uses and activities that may include housing, recreation, and cultural activities in association with commercial uses. 2. The residential targeted area lacks sufficient available, desirable, and convenient residential housing, including affordable housing, to meet the needs of low- and moderate-income households who would be likely to live in the urban center if such housing were available; and 3. Multifamily housing and affordable housing opportunities will be increased in the residential target area. B. The Council may amend or rescind the designation of a residential targeted area at any time by ordinance, consistent with RCW 84.14.040. C. All parcels in Seattle zoned to allow Multifamily Housing according to Title 23, including but not limited to Chapters 23.45, 23.46, 23.47A, 23.48, and 23.49, are designated as a single residential targeted area under this Chapter 5.73. (Ord. 127316, § 2, 2025; Ord. 125932, § 3, 2019; Ord. 124877, § 3, 2015; Ord. 122730, § 3, 2008; Ord. 121415, § 1, 2004.)

Seattle Mun. Code § 5.73.040 Eligibility

5.73.040 - Eligibility Eligibility of multifamily housing for exemption from property taxation is conditioned on compliance with this Chapter 5.73, including applicable requirements of this Section 5.73.040, for the duration of the compliance period. A. General requirements 1. The multifamily housing must be located on a parcel or parcels within a residential targeted area. 2. In each multifamily housing structure, the total net unit area of units must comprise 50 percent of the total above-grade gross floor area. 3. The owner shall obtain a certificate of approval, permit, or other approval under Chapter 23.66 or Chapter 25.12, or those provisions of Chapter 25.16, Chapter 25.20, Chapter 25.22, Chapter 25.24, and Chapter 25.28 that relate to Landmark or Historical Districts, if such certificate of approval, permit, or other approval is required under those chapters. 4. The multifamily housing must comply with all applicable provisions of Titles 22, 23, and 25. 5. For the duration of the exemption granted under this Chapter 5.73, the multifamily housing and the property on which it is located shall have no violation of applicable provisions of Titles 22, 23, and 25 issued by SDCI that is not resolved by a certificate of compliance, certificate of release, or withdrawal within the time period for compliance provided in such notice of violation or as extended by the Director of SDCI. 6. Units must be configured consistent with the plan set approved by SDCI and distribution and comparability requirements according to subsection 5.73.040.B.5. 7. All structures comprising the multifamily housing must be complete, as documented by the temporary certificate of occupancy (TCO), final certificate of occupancy if no TCO is required, or SDCI final building permit inspection if no certificate of occupancy is required, before expiration of the Conditional Certificate according to subsection 5.73.060.E. 8. Fees that would apply only to eligible households are prohibited. 9. All units in the multifamily housing must be marketed to the public. MFTE units shall be affirmatively marketed to attract eligible households from all racial, ethnic, and gender groups in the neighborhood market area, particularly to inform and solicit applications from households who are otherwise unlikely to apply. Proposed affirmative marketing plans shall be submitted to the Office of Housing for review and approval and must comply with federal, state, and local fair housing laws. Records documenting affirmative marketing efforts shall be maintained and submitted to the Office of Housing upon request. 10. MFTE units may not be sub-leased and prospective MFTE unit tenants must be offered the option of an initial lease term of at least 12 months. 11. If the construction of a new residential building results in the demolition of an existing residential building that is subject to the City's tenant relocation assistance requirements under Chapter 22.210, the owner must demonstrate compliance with Chapter 22.210. B. Additional requirements for multifamily rental housing include the following: 1. Each residential and mixed-use structure that comprises the multifamily housing shall include at least four new units, net of any units demolished for the project. 2. The set-aside of MFTE units in each structure that comprises the multifamily housing is 20 percent of the total units in the multifamily housing if at least 12 percent of the total units are configured with two or more bedrooms, or if at least three percent of the total units are configured with three or more bedrooms. Otherwise, the set-aside is 25 percent of the total units in the multifamily housing. 3. If the total number of MFTE units calculated according to subsection 5.73.040.B.2 contains a fraction, then the number of MFTE units shall be rounded up to the next whole number. 4. The income and rent limits for MFTE units are as follows: Unit type for rent limit | Number of standard bedrooms | Number of alternative bedrooms | Affordability limit (Percentage of median income) Congregate sleeping room | 0 | 0 | 40% 0-bedroom/Studio ≤ 320 square feet | 0 | 0 | 50% 0-bedroom/Studio > 320 square feet | 0 | 0 | 60% 1-bedroom | 0 | 1 | 70% 1-bedroom | 1 | 0 | 75% 2-bedroom | 0 | 2 | 80% 2-bedroom | 1 | 1 | 85% 2-bedroom | 2 | 0 | 90% 3-bedroom | 0 | 3 or more | 85% 3-bedroom | 1 | 2 or more | 85% 3-bedroom | 2 | 1 or more | 90% 3-bedroom | 3 or more | 0 | 90% 5. Distribution and comparability a. Distribution. MFTE units shall be distributed in each structure that comprises the multifamily housing as follows: 1) If the percentage of MFTE units set-aside is 25 percent, then no more than 30 percent of the units on a floor shall be MFTE units. If the percentage of MFTE units set-aside is 20 percent, then no more than 25 percent of the units on a floor shall be MFTE units; or 2) On the middle floor(s), excluding any levels with structured parking, and on floors equally above and below the middle floor(s), provided that no more than one-half of the total units on any given floor are MFTE units. b. Comparability. MFTE units shall be generally comparable to the standard unrestricted units in each structure that comprises the multifamily housing in terms of the following: 1) Number of bedrooms and bathrooms; 2) Bedroom type (standard or alternative); 3) Accessibility (e.g., Type A units); 4) Net unit area measured by square feet (must be within 95 percent of standard unrestricted unit size); 5) Access to the building's common amenity areas; 6) Basic functionality, which means MFTE designated units should generally be comparable in function and include the same features and finishes as the standard unrestricted units. Premium features and finishes associated with units designed to secure higher rents than the standard unrestricted units should not be used to assess comparability; and 7) Term of the lease. 6. Cap on rent increases a. Affordable rent for an MFTE unit occupied by an eligible household may not increase annually by more than the following, whichever is lower: 1) The percentage change in affordable rent limits published by the Office of Housing, as based on median income, compared to the previous year; or 2) The maximum rent increase determined and published by the Washington State Department of Commerce under RCW 59.18.700, regardless of when a certificate of occupancy was issued. b. Subsection 5.73.040.B.6.a does not prohibit an owner from increasing the affordable rent to the rent limit allowed for the MFTE unit according to subsection 5.73.040.B.4 after a tenant vacates and the tenancy ends. c. The annual rent cap on affordable rent increases under Ordinance 125932 shall remain in effect for any eligible household in an MFTE unit until the household vacates the unit, provided the household's lease was in effect prior to the effective date of this ordinance. C. Additional requirements for permanently affordable homes 1. The project must provide at least four new permanently affordable homes for eligible households with annual incomes no greater than 80 percent of median income, net of any units demolished for the project. 2. Each permanently affordable home shall be owned and occupied by an eligible household as its principal residence. The eligible household may not offer the home for lease unless provided a written, limited, short-term exception by the Director. 3. The qualified non-profit organization must: a. Ensure ongoing affordability and compliance of each permanently affordable home consistent with this Chapter 5.73 and the MFTE agreement; b. Document eligibility consistent with Section 5.73.105; c. Estimate the affordable sale price according to subsection 5.73.040.C.4; d. Report to the Office of Housing on an annual basis according to Section 5.73.100; and e. Provide the Director notice at least 30 days prior to resale of each permanently affordable home. 4. Affordable sale price a. Initial affordable sale price. The qualified non-profit organization must propose an affordable sale price for the initial eligible household and serving as the basis of affordable sales prices for future eligible households for 99 years. Generally, the affordable sale price ensures total housing payments in the range of 25 percent to 35 percent of the household's income. The Office of Housing shall evaluate a proposed initial sale price assuming the minimum required homebuyer contribution. Other assumptions used to determine the initial sale price, including but not limited to housing payment ratios, interest rates, and property taxes, are subject to Office of Housing approval. b. Affordable sale price for resales. A resale price formula shall be applied to the initial sale price and shall restrict future sale prices to ensure affordability for eligible households over time. The resale price formula may allow for a limited annual increase in resale prices, generally between one and three percent per year, with possible adjustments as approved by the Office of Housing based on terms of subordinate loans. c. For both initial sales and resales, the Office of Housing shall review and approve permanently affordable homes and buyer households consistent with this Chapter 5.73. 5. Requirements of this subsection 5.73.040.C shall apply to multifamily housing owned by a cooperative and occupied by the shareholders of a cooperative. (Ord. 127316, § 2, 2025; Ord. 127187, § 3, 2025; Ord. 126443, § 3, 2021; Ord. 125932, § 4, 2019; Ord. 124919, § 15, 2015 [department name change and style cleanup]; Ord. 124877, § 4, 2015; Ord. 124724, § 1, 2015; Ord. 123727, § 1, 2011; Ord. 123550, § 1, 2011; Ord. 122730, § 4, 2008; Ord. 121915, § 2, 2005; Ord. 121415, § 1, 2004.)

Seattle Mun. Code § 5.73.050 MFTE application procedure—Fee

5.73.050 - MFTE application procedure—Fee A. A complete MFTE application on a form provided by the Office of Housing and verified by oath or affirmation of the owner or qualified non-profit organization must be submitted to the Office of Housing at least 180 days prior to the date of the temporary certificate of occupancy, or permanent certificate of occupancy if no temporary certificate is issued, for the multifamily housing. The application shall contain such information as the Director may deem necessary to evaluate eligibility of the multifamily housing for a property tax exemption under this Chapter 5.73, including: 1. An SDCI building permit ID (7-digit number ending in -CN or -PH); 2. A statement from the owner acknowledging the potential tax liability of the multifamily housing; 3. Characteristics of each unit, including proposed MFTE units consistent with Section 5.73.040, as applicable; and 4. A title report, no more than three months old, that confirms the legal description and ownership of the property that includes the multifamily housing; 5. Documentation satisfactory to the Director of the type and organizational structure of the owner; 6. A sample signature block for the owner; and 7. Evidence satisfactory to the Director that the MFTE application is signed by the owner's authorized representative. B. MFTE application fee 1. The MFTE application shall include a non-refundable check payable to The City of Seattle in the amount of the MFTE program fee according to subsection 5.73.050.B.2, plus an amount to reimburse the Office of Housing for actual cost of the recording fee for the MFTE agreement. 2. The MFTE program fee is $2,000, plus $200 per unit, not to exceed $10,000 in total. 3. If the application is for permanently affordable homes awarded capital funding by the Office of Housing, no application fee is due. (Ord. 127316, § 2, 2025; Ord. 127187, § 4, 2025; Ord. 125932, § 5, 2019; Ord. 124919, § 16, 2015 [department name change and style update]; Ord. 124877, § 5, 2015; Ord. 123550, § 2, 2011; Ord. 122730, § 5, 2008; Ord. 121915, § 3, 2005; Ord. 121415, § 1, 2004.)

Seattle Mun. Code § 5.73.060 Application review—Issuance of Conditional Certificate—Denial—Appeal—MFTE agreement

5.73.060 - Application review—Issuance of Conditional Certificate—Denial—Appeal—MFTE agreement A. The Director shall provide written notice of approval or denial of an MFTE application according to this Chapter 5.73 no more than 60 days after receipt of a complete MFTE application according to Section 5.73.050. B. If the MFTE application is approved, the Office of Housing shall provide within 30 days of sending written notice of approval: 1. A complete MFTE agreement, the terms of which shall be according to this Chapter 5.73 as of the date of receipt of the complete initial MFTE application; and 2. A signed Conditional Certificate, including a table based on available information that documents the characteristics of each unit consistent with Section 5.73.040. C. The MFTE agreement shall be executed within 90 days of the date of written approval of the MFTE application, or such application shall be deemed withdrawn by the owner. D. The MFTE agreement shall be recorded in the real property records of the King County Recorder's Office. E. The Conditional Certificate shall expire three years from the date the Office of Housing initially receives the MFTE application or up to five years from such date if an extension is approved according to Section 5.73.070. F. If the MFTE application is denied, within ten days of the decision the Director shall deliver written notice, including the reasons for the denial, to the address of the owner contact provided in the MFTE application. G. An appeal to the Hearing Examiner of denial of an MFTE application may not be considered unless filed within 30 days of the date of receipt of the written notice from the Office of Housing. The appeal before the Hearing Examiner must be based on the record before the Director, and the Director's decision shall be upheld unless the owner demonstrates that no substantial evidence in the record supports the Director's decision. The Hearing Examiner's decision on the appeal is final. H. 1. If, on the effective date of this ordinance, an owner has submitted a valid MFTE application under a prior version of the MFTE program and has not yet received a Final Certificate, the owner may opt to convert the application to the most current MFTE program at any point before issuance of the Final Certificate. 2. An owner who in 2025 receives, or has received, a Final Certificate under Ordinance 125932 may opt to convert to the most current MFTE program. The procedures to apply for a conversion, including any required fee, may be established by the Director. Property owners must submit an application for a conversion by December 31, 2025. OH has until June 30, 2026 to convert any projects approved under Ordinance 125932 to the most current MFTE program. The project shall operate under its existing MFTE agreement with terms established under Ordinance 125932 until a new contract with the most current MFTE program terms is executed. The start date for the 12-year tax exemption shall continue to be January 1 of the year immediately following the calendar year of the date of the Final Certificate issued under Ordinance 125932. If that project has already leased some or all MFTE units, the affordable rents under Ordinance 125932 shall remain in effect for any eligible household in an MFTE unit until the household vacates the unit, provided the household's lease was in effect prior to the effective date of this ordinance. (Ord. 127316, § 2, 2025; Ord. 125932, § 6, 2019; Ord. 124877, § 6, 2015 [department name change and style update]; Ord. 123550, § 3, 2011; Ord. 121415, § 1, 2004.)

Seattle Mun. Code § 5.73.065 Amendment, subordination, or termination of MFTE agreement

5.73.065 - Amendment, subordination, or termination of MFTE agreement The owner may submit a written request to the Office of Housing for amendment, subordination, or termination of the MFTE agreement if the request includes a non-refundable check payable to The City of Seattle for $750 plus an amount equal to the King County recording fee or delivery fees if required. (Ord. 127316, § 2, 2025; Ord. 125932, § 7, 2019; Ord. 123550, § 4, 2011; Ord. 122730, § 6, 2008; Ord. 121415, § 1, 2004.)

Seattle Mun. Code § 5.73.070 Extension of Conditional Certificate

5.73.070 - Extension of Conditional Certificate A. The expiration date of a Conditional Certificate may be extended by the Director by up to 24 months if, at least 60 days prior to expiration of the Conditional Certificate according to subsection 5.73.060.E, the owner submits to the Director a written request stating the grounds for extension together with a fee of $500 for the City's administrative cost to process the request. The Director may grant an extension if the Director determines that: 1. The anticipated failure to complete the multifamily housing prior to expiration of the Conditional Certificate is due to circumstances beyond the control of the owner; and 2. The owner has been acting and could reasonably be expected to continue to act in good faith and with due diligence; and 3. All conditions of the MFTE agreement will be satisfied upon completion of the project. B. If the Conditional Certificate expires according to subsection 5.73.060.E without request for an extension according to subsection 5.73.070.A, the MFTE application shall be deemed withdrawn by the owner. (Ord. 127316, § 2, 2025; Ord. 127187, § 5, 2025; Ord. 126392, § 1, 2021; Ord. 125932, § 8, 2019; Ord. 124877, § 7, 2015; Ord. 122730, § 7, 2008; Ord. 121415, § 1, 2004.)

Seattle Mun. Code § 5.73.080 Final Certificate—Application—Issuance—Denial and appeal—Fee

5.73.080 - Final Certificate—Application—Issuance—Denial and appeal—Fee A. A complete application for Final Certificate, on a form provided by the Office of Housing, must be received by the Office of Housing within 30 days of project completion as documented by its temporary certificate of occupancy, or a permanent certificate of occupancy if no temporary certificate is issued, or final building permit inspection if no certificate of occupancy is required. Consistent with RCW 84.14.090, only one Final Certificate may be issued for each MFTE application submitted according to Section 5.73.050. B. The owner shall file with the Director such information as the Director may deem necessary to evaluate eligibility for a Final Certificate, including: 1. A statement of total and per-unit construction expenditures for the multifamily housing; 2. Consistent with the final approved plan set for the project, changes to the table issued with the Conditional Certificate that documents the characteristics of each unit consistent with Section 5.73.040; 3. Documentation that the multifamily housing was completed by the deadline according to subsection 5.73.060.E; 4. A statement describing any changes to the multifamily housing after approval of the MFTE application according to Section 5.73.060; 5. A statement of the asking rent or sales price for each unit in the multifamily housing; 6. Either an updated title report for the property that includes the multifamily housing or a statement confirming that the title report on file with the Office of Housing is current and accurate; and 7. A statement confirming that the documentation on file with the Office of Housing of the type and organizational structure of the owner, signature block for the owner, and authority of the owner representative that signed the MFTE agreement is all current and accurate. C. The applicant shall provide payment to the Assessor to cover the Assessor's fee for administrative costs upon notification that the application for a Final Certificate has been approved. D. Within 30 days of receipt of a complete Final Certificate application, the Director shall notify the owner in writing of the decision to approve or deny the request to file a Final Certificate for the multifamily housing with King County according to this Chapter 5.73. E. If the Final Certificate application is approved, the City shall file a Final Certificate with the Assessor no more than ten days after the expiration of the 30-day period provided under subsection 5.73.080.D. The Final Certificate shall include a table with the characteristics of each unit consistent with Section 5.73.040. F. The owner may appeal to the King County Superior Court denial of a Final Certificate due to ineligibility of the multifamily housing for a tax exemption under this Chapter 5.73 if the appeal is filed no more than 30 days after receipt of notice of the decision. (Ord. 127316, § 2, 2025; Ord. 125932, § 9, 2019; Ord. 124877, § 8, 2015; Ord. 123550, § 5, 2011; Ord. 121415, § 1, 2004.)

Seattle Mun. Code § 5.73.090 Exemption—Duration—Limits

5.73.090 - Exemption—Duration—Limits A. The value of multifamily rental housing qualifying under this Chapter 5.73 shall be exempt from ad valorem property taxation for up to 12 successive years beginning January 1 of the year immediately following the calendar year of the date of the Final Certificate. B. The value of each permanently affordable home according to this Chapter 5.73 shall be exempt from ad valorem property taxation for up to 20 successive years beginning January 1 of the year immediately following the calendar year of the date of the Final Certificate. C. Extended property tax exemption 1. The owner may apply for an extended exemption of the value of qualifying multifamily rental housing from ad valorem property taxation for up to a total of 12 successive years beginning January 1 of the year immediately following the calendar year that the original 12-year exemption expires according to subsection 5.73.090.A if the Office of Housing receives an application to extend MFTE for an additional 12 years, on a form provided by the Office of Housing, no later than May 1 of the scheduled expiration year. 2. The application shall contain information as the Director may deem necessary to evaluate eligibility of the multifamily housing for an extended property tax exemption according to Chapter 5.73, consistent with this subsection 5.73.090.C, plus the following: a. Owner affidavits, including acknowledgement of the potential tax liability of the multifamily housing; b. A title report dated within three months of the application submission date, for all, and only those, parcels on the property, and identifying the fee simple owner; c. A sample signature block for the owner and, if the signature block includes more than one entity, an operating agreement confirming the relationship between the grantor and other entities identified in the signature block; and d. A non-refundable check for the MFTE extension application fee, payable to The City of Seattle in the amount of the MFTE program fee according to subsection 5.73.050.B.2, and a commitment of the owner to pay the actual cost of Assessor administrative fees and King County recording fees prior to issuance of a new Final Certificate. 3. Criteria for decisions to approve an MFTE extension application include that: a. The multifamily housing would be eligible for MFTE under current rules; b. The multifamily housing and the property on which it is located must have no SDCI-issued violations of applicable provisions of Titles 22, 23, and 25 that failed to be resolved by a certificate of compliance, certificate of release, or withdrawal within the time period for compliance provided in such notice of violation or as extended by the Director of SDCI; c. A record exists with complete annual reports, passing audits as part of regular program monitoring, and no outstanding areas of concern or findings of non-compliance with the MFTE agreement and this Chapter 5.73; and d. Documentation exists of tenant notification of the owner's intent to pursue a 12-year extension of the property tax exemption and required income verification for MFTE unit tenants according to subsection 5.73.090.C.6.a. 4. A documented pattern of non-compliance with the MFTE agreement for the initial 12-year tax exemption is a ground for denial. 5. If the MFTE extension application is approved, a new MFTE agreement shall be executed and recorded on the title of the property that includes the multifamily housing committing the owner to requirements according to this Chapter 5.73, except that: a. MFTE units shall be leased at affordable rents to eligible households with annual incomes five percentage points lower than the limits according to subsection 5.73.040.B.4, except that the limits may not exceed 80 percent of median income per RCW 84.14.020 and studios greater than 320 square feet are regulated at 60 percent of median income; and b. The MFTE agreement shall consider current MFTE unit tenants income eligible as determined according to subsection 5.73.090.C.6.b, consistent with subsection 5.73.090.C.9. 6. For properties with initial 12-year exemptions that intend to apply for the 12-year extension, the owner shall: a. No later than May 1 of the calendar year in which the MFTE exemption is set to expire, provide written notice to all tenants of MFTE units of owner's intent to pursue a 12-year extension of the property tax exemption and initiate the income verification process for each MFTE unit tenant household without an annual income certification in the calendar year in which the exemption is set to expire; and b. Provide to the Office of Housing the verified annual income of the tenant household for each MFTE unit according to Section 5.73.105 by September 30 of the calendar year in which the exemption is set to expire. 7. The share of total units provided as MFTE units shall be according to subsection 5.73.040.B.2. 8. Upon approval of an extended tax exemption according to this Chapter 5.73, the Director shall file a new Final Certificate with the Assessor. The owner shall be responsible for any administrative fees charged by the Assessor. 9. To steadily transition multifamily housing to full compliance with requirements for an extended property tax exemption, the following provisions apply: a. For each MFTE unit, the affordable rent according to the current tenant's lease agreement as of January 1 of the calendar year subsequent to expiration of the initial 12-year property tax exemption and thereafter shall be no greater than according to subsection 5.73.090.C.5.a if an income verification demonstrates, consistent with Section 5.73.105, that the tenant household is an eligible household according to subsection 5.73.090.C.5.a. b. If an income verification demonstrates that the tenant household would not be an eligible household according to subsection 5.73.090.C.9.a, the next comparable unit that is available, as approved by the Office of Housing, shall be designated as an MFTE unit and leased to an eligible household. c. After income recertifications are submitted to the Office of Housing according to subsection 5.73.090.C.6.b, all vacant MFTE units shall be leased at an affordable rent to an eligible household according to subsection 5.73.090.C.5.a. D. The property tax exemption for multifamily housing does not apply to the value of the following: 1. Land; 2. Non-residential improvements, including lodging, short-term rentals, and live-work units; 3. Areas of the multifamily housing where residents must pay a fee for use or access, except that: a. The City shall exempt fee-generating structured residential parking garages from property taxes; and b. Fees for occasional use of areas by private parties are permitted if the area is generally open and accessible at no cost to all residents; 4. Units not marketed and available to the general public or that are leased by owners and/or their family and friends; 5. Increases in assessed valuation of land and non-qualifying improvements; and 6. Increases, made by lawful order of the King County Board of Appeals and Equalization, the Washington State Department of Revenue, State Board of Tax Appeals, or King County, to a class of property throughout the county or a specific area of the county to achieve uniformity of assessment or appraisal as required by law. E. Appraisal and addition of the new construction value of multifamily properties awarded a property tax exemption according to this Chapter 5.73 shall be according to chapter 84.55 RCW and chapter 36.21 RCW. F. The owner must provide written notice to the Office of Housing of intent to appeal the valuation of the multifamily housing to the Assessor prior to filing such appeal. (Ord. 127316, § 2, 2025; Ord. 127187, § 6, 2025; Ord. 127016, § 1, 2024; Ord. 126792, § 1, 2023; Ord. 126443, § 4, 2021; Ord. 125932, § 10, 2019; Ord. 124877, § 9, 2015 [style update]; Ord. 123550, § 6, 2011; Ord. 122730, § 8, 2008; Ord. 121415, § 1, 2004.)

Seattle Mun. Code § 5.73.100 MFTE compliance reporting

5.73.100 - MFTE compliance reporting A. At such times as may be required by the Director, but no less than annually for the duration of the compliance period, the owner or qualified non-profit organization, as applicable, shall file a report, including supporting documentation, with the Office of Housing, verified upon oath or affirmation, which shall contain such information as the Director may deem needed to document compliance with the MFTE agreement and this Chapter 5.73 and to estimate the costs and benefits to the public of the property's tax exemption. 1. For multifamily rental housing, the compliance report shall include: a. A statement of gross housing costs, including contract rent, the estimate of tenant paid utilities, and any other required fees not included in the rent for each unit (restricted and unrestricted); b. Occupancy rates for each unit (MFTE units and unrestricted units) and, for MFTE units, initial and most recent lease start dates and move-out dates; c. A certification that total net rentable floor area of the multifamily housing has not changed since the date of the Final Certificate; d. A description of any improvements or modifications to the multifamily housing since the date of the Final Certificate or most recent annual compliance report, as applicable; e. For each MFTE unit, the annual income and household size of each eligible household, verified consistent with Section 5.73.105; and f. Any other information required by the Director to comply with City and State reporting obligations. 2. For permanently affordable homes, the qualified non-profit organization shall submit a report documenting compliance of each MFTE unit and eligible household with the requirements according to subsection 5.73.040.C. B. The owner or qualified non-profit organization shall submit a complete annual compliance report. The annual compliance report shall be filed with the Office of Housing by January 31 of the calendar year immediately following the date of the Final Certificate and each year thereafter for each year the property tax exemption was granted. C. Failure to submit complete and accurate reports by required deadlines may result in cancellation of the tax exemption according to Section 5.73.110. (Ord. 127316, § 2, 2025; Ord. 126443, § 5, 2021; Ord. 125932, § 11, 2019; Ord. 124877, § 10, 2015; Ord. 122730, § 9, 2008; Ord. 121415, § 1, 2004.)

Seattle Mun. Code § 5.73.105 Eligible household income verification

5.73.105 - Eligible household income verification Annual compliance reports according to Section 5.73.100 shall include the verified income for each household occupying an MFTE unit. Income verifications shall be in accordance with standardized procedures and policies established by the Office of Housing for administration of this Chapter 5.73. If the tenant household refuses to provide documentation for required income verifications or no longer qualifies as an eligible household, the owner or owner representative shall contact the Office of Housing to identify another comparable unit to be promptly leased to an eligible household. The owner shall honor the terms of the lease for the unit occupied by the tenant that is no longer an eligible household until lease expiration. After the lease expires, that unit shall be an unrestricted unit. (Ord. 127316, § 2, 2025; Ord. 126443, § 6, 2021; Ord. 125932, § 12, 2019; Ord. 124877, § 11, 2015.)

Seattle Mun. Code § 5.73.110 Cancellation of tax exemption—Appeal—Penalties

5.73.110 - Cancellation of tax exemption—Appeal—Penalties A. Cancellation of tax exemption upon scheduled expiration date 1. For multifamily rental housing according to Section 5.73.040 or subsection 5.73.090.C, the tax exemption shall be cancelled on December 31 of the twelfth successive year beginning January 1 of the year immediately following the calendar year of the date of the Final Certificate; and 2. For permanently affordable homes according to subsection 5.73.040.C, the tax exemption shall be cancelled on December 31 of the twentieth successive year beginning January 1 of the year immediately following the calendar year of the date of the Final Certificate. B. Cancellation of tax exemption upon owner opt-out. The owner shall provide written notice to the Director at least 60 days prior to the scheduled date of voluntary termination of the MFTE agreement and tax exemption. The owner's notice to the Office of Housing shall document that tenant notification and relocation assistance requirements have been satisfied according to Section 5.73.115, if applicable. Upon receipt of notice from the owner, the Director shall notify the Assessor with instruction to cancel the tax exemption and assess additional taxes, interest, and penalty according to RCW 84.14.110. C. Cancellation of tax exemption due to change of use. The owner shall provide written notice to the Director at least 60 days prior to the scheduled date of voluntary termination of the MFTE agreement and tax exemption due to a change of all or a portion of the residential floor area to a non-residential use. The owner's notice to the Office of Housing shall document that tenant notification and relocation assistance requirements have been satisfied according to Section 5.73.115, if applicable. Upon receipt of notice from the owner, the Director shall notify the Assessor with instruction to cancel the tax exemption and assess additional taxes, interest, and penalties according to RCW 84.14.110. D. Cancellation of tax exemption due to non-compliance 1. If an owner, owner representative, or qualified non-profit organization fails to provide the number of MFTE units committed according to the Final Certificate or fails to properly screen income eligibility for prospective MFTE unit tenants, the City may impose a sliding scale penalty based on rent reductions not provided to an eligible household, with consideration of the severity of the non-compliance. If the owner, owner representative, or qualified non-profit organization is subsequently found to be in substantial non-compliance with the MFTE agreement for the property, the City shall cancel the tax exemption pursuant to RCW 84.14.110(1)(a). Upon receipt of the Director's notice of intent to cancel the tax exemption, the owner shall satisfy tenant relocation assistance requirements according to Section 5.73.115, if applicable. 2. If a household that owns a permanently affordable home violates conditions of the tax exemption, the City may notify the Assessor with instruction to cancel the tax exemption for that home and assess additional taxes, interest, and penalties according to RCW 84.14.110. 3. An owner, owner representative, or qualified non-profit organization that fails to promptly correct non-compliance with the MFTE agreement or this Chapter 5.73 shall not be eligible to apply for an extended property tax exemption according to this Chapter 5.73. 4. Violation of City and state fair housing laws banning housing discrimination shall be grounds for cancellation of the tax exemption. E. The Director shall notify the owner or qualified non-profit organization, as applicable, by certified mail, return receipt requested, of any decision to cancel the tax exemption due to non-compliance with the MFTE agreement or this Chapter 5.73. F. Cancellation of an exemption may be appealed by the owner or qualified non-profit organization, as applicable, if alleging the factual and legal basis on which the determination of cancellation to be erroneous and if the appeal is filed with the Hearing Examiner and City Clerk within 30 days of receipt of notice of cancellation. The Hearing Examiner will conduct a hearing pursuant to Section 3.02.090 at which all affected parties may be heard and all competent evidence received. The Hearing Examiner shall affirm, modify, or reverse cancellation of the exemption based on the evidence received. The Hearing Examiner shall give substantial weight to the Director's decision and the burden of overcoming that weight shall be upon the appellant. An aggrieved party may appeal the Hearing Examiner's decision to the King County Superior Court as provided in RCW 34.05.510 through 34.05.598. (Ord. 127316, § 2, 2025; Ord. 126443, § 7, 2021; Ord. 125932, § 13, 2019; Ord. 124877, § 12, 2015 [style update]; Ord. 121415, § 1, 2004.)

Seattle Mun. Code § 5.73.115 Tenant notice and relocation assistance requirements

5.73.115 - Tenant notice and relocation assistance requirements A. Consistent with RCW 84.14.020, the owner shall: 1. By September 30 of each of the final two years of the tax exemption period, notify each household occupying an MFTE unit of relocation requirements according to subsection 5.73.115.A.2; and 2. At least 90 days prior to the date rent restrictions end for the MFTE units, due to expiration of the exemption or otherwise, provide relocation assistance to each eligible household verified according to Section 5.73.105. The amount of the tenant assistance shall either be equal to the monthly rent according to the current lease agreement for the unit or an amount otherwise required by federal, state, and local law, whichever is greater. B. This Section 5.73.115 shall only apply to properties with MFTE agreements executed on or after the effective date of Ordinance 126443. (Ord. 127316, § 2, 2025)

Seattle Mun. Code § 5.73.120 Expiration of the City's MFTE program

5.73.120 - Expiration of the City's MFTE program The City's MFTE program as authorized by this Chapter 5.73 shall sunset on September 1, 2029 unless extended by the City Council by ordinance. After the program sunsets, no new MFTE applications shall be accepted. Pending Conditional Certificates and Final Certificates shall be processed as provided according to this Chapter 5.73. (Ord. 127316, § 2, 2025; Ord. 127187, § 7, 2025; Ord. 127084, § 1, 2024; Ord. 127016, § 2, 2024; Ord. 126792, § 2, 2023; Ord. 125932, § 14, 2019; Ord. 124877, § 13, 2015; Ord. 123550, § 7, 2011; Ord. 122730, § 10, 2008; Ord. 121415, § 1, 2004.)

Seattle Mun. Code § 5.73.130 Office of Housing annual report to City Council

5.73.130 - Office of Housing annual report to City Council A. The Office of Housing shall report annually by June 30 to the City Council on MFTE program performance for the prior calendar year, including the following information: 1. Initial MFTE applications by project type, size, location, unit mix, estimated MFTE units, and cumulative information for each MFTE program version since MFTE inception; 2. Final Certificates issued by project type, size, location, unit mix, estimated MFTE units and cumulative information for each MFTE program version since MFTE inception. 3. The "opt-in" rate for MFTE participation, calculated by the number of multifamily buildings that received a Final Certificate of Tax Exemption for the MFTE program divided by the total number of multifamily buildings that receive a Certificate of Occupancy or equivalent in that year, broken down by building type (including but not limited to low-rise, mid-rise, and high-rise). The report shall also note the number of units provided by the MFTE buildings and the non-participating buildings. The opt-in rate should also be calculated separately for MFTE extensions, calculated by the number of buildings that apply for an extension divided by the total MFTE agreements expiring; 4. Average rent and vacancy rates for unrestricted units and MFTE units with active Final Certificates by unit type for each building; 5. Information on the buy-down between market rate units and restricted rents and the ratio of the value of the property tax exemption as compared to the rent buy-down; 6. Total value of the property tax exemptions, estimates of foregone tax revenue and shifted taxes, and the estimated cost to an owner of a median value home in Seattle. Foregone estimates shall be for all taxing jurisdictions and for The City of Seattle specifically; 7. Income and demographic information on tenants in the MFTE program, including cost burden; 8. Changes in housing market conditions and activity; and 9. Changes to State law that relate to the MFTE program and labor standards. B. The Director may recommend changes to the MFTE program, based on report findings or other analysis, as appropriate. C. The Office of Housing shall collect labor-related data on projects participating in the MFTE program to advance labor equity outcomes, including payment of prevailing wages, in housing development in Seattle. This data shall include, but not be limited to: construction wage information, apprentice utilization, number of workers graduating from pre-apprenticeship programs, and the number of workers who participated in mentoring and other training programs. The Office of Housing shall include the requested data in the annual report. The Office of Housing shall work with MFTE developers, labor unions, and executive agencies to identify ways to comply with and minimize the administrative costs associated with this data collection and submittal process. The Office of Housing has the authority, including rule-making authority, to require an owner to provide the data as part of the owner's annual compliance reporting under Section 5.73.100. (Ord. 127316, § 2, 2025; Ord. 127145, § 1, 2024; Ord. 125932, §§ 15, 16, 2019.)

Seattle Mun. Code § 5.73.135 Guidance for amendments to the City's MFTE program

5.73.135 - Guidance for amendments to the City's MFTE program The City should regularly evaluate the MFTE program to inform potential future amendments. Changes to the City's MFTE program may be advisable after four years from the effective date of this ordinance if: A. The program has not achieved its established purpose; B. Housing market conditions have changed substantially; C. The "opt-in rate" described in subsection 5.73.130.A.3 has changed substantially; or D. State law governing the program has changed. (Ord. 127316, § 2, 2025)

Seattle Mun. Code § 5.73.140 MFTE program fees—automatic adjustment

5.73.140 - MFTE program fees—automatic adjustment Fees authorized in this Chapter 5.73, as well as the fee total in subsection 5.73.050.B.2, may be adjusted by rule by the Director annually on March 1 by an amount in proportion to the increase, if any, for January 1 through December 31 of the prior calendar year, in the Consumer Price Index, All Urban Consumers, Seattle-Tacoma-Bellevue, WA, All Items (1982-1984=100), as determined by the U.S. Department of Labor, Bureau of Labor Statistics or successor index, rounded up to the nearest $10. (Ord. 127316, § 2, 2025)

Source: City of Seattle, Seattle Municipal Code and City Charter (Municode Library, library.municode.com)URL: https://library.municode.com/wa/seattle/codes/municipal_code?nodeId=TIT5REFITA_SUBTITLE_IITA_CH5.73MUHOPRTAEXPRFetched: 11/1/2026