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Multi-Family Tax Exemption (MFTE) Program Trimester Report

MFTE program requirements passed by the Council last February included a new requirement for trimester progress reports from the Office of Housing (OH).  Yesterday, OH released a trimester report covering the MFTE program housing production results from September 1 to December 31, 2011.

The MFTE program was passed in 1998. The primary goals of the program are 1) to promote development in areas not meeting growth targets and/or on transit lines and 2) to get more low and moderate income housing built. Developers building housing with a percentage reserved for low-income residents in targeted neighborhoods get a multi-year property tax exemption which results in a small redistribution of property tax to other property owners.  Over the years, the target neighborhoods have changed as has the level of affordability required in the reserved low-income units.  The new affordability requirements are that 20% of the units in the buildings must, if studios, rent to people earning 65% of area median income (about $39,500/year) for no more than $988/month.  One bedroom apartments must rent to people earning 75% of area median income (about $52,125/year) for no more than $1,303/month and two bedroom apartments must rent to people earning 85% of area median income (about $73,780/year) for no more than $1,661/month.

The new report finds that between September and the end of December 2011, six applications were approved by the OH Director for rental projects providing 493 total units, of which 205 will meet the MFTE program’s affordability requirements.  The buildings will be located in Aurora Licton Springs, Belltown, Capitol Hill, 12th Avenue, Roosevelt, and Wallingford.  There were a total of 21 applications approved during 2011 for 1,921 total units of housing, of which 617 will be affordable.

The Office of the Auditor is working on an audit, on my request, to determine whether the MFTE Program is achieving its goals.  I continue to support increasing the number of rent-restricted units required under the program and making them available to lower income people, for whom the need is greatest.  If you’d like a copy of this report, contact Lisa in my office at lisa.herbold@seattle.gov.

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