Multifamily Tax Exemption

The Multifamily Property Tax Exemption is an affordable housing incentive for new apartment development in targeted areas of Bellevue. The MFTE provides a 12-year exemption from property taxes paid on the housing portion of qualifying projects in exchange for setting aside 20 percent of the units for income-eligible households.

The tax exemption is available in the following areas:

In June 2015, the City Council adopted the multifamily housing property tax exemption (City Code 4.52) through Ordinance 6231. RCW 84.14 addresses such tax exemptions in state law. 

The MFTE information sheet provides program overview, tables and a map of the targeted areas in an easy-to-print format.

Is my apartment project eligible for an MFTE property tax exemption?

Projects must meet the following eligibility requirements:

  • The project is new construction, multifamily rental housing located in a targeted residential area.
  • The project can be all residential or mixed-use residential of at least four dwelling units. At least 50 percent of the project is residential use.
  • At least 15 percent of the dwelling units are two or more bedrooms.
  • The mix and configuration of affordable units at each affordability level must be substantially proportional to the mix and configuration of all housing units in the project.
  • The affordable units are constructed of similar quality and finishes as the other units of the project.
  • In projects containing more than one building, all the affordable units are not located in the same building.
  • The development does not result in the net loss of existing, federally subsidized affordable housing.
  • Construction is completed within three years from application approval or within an extension period approved by the director.
  • The project complies with all other applicable provisions of the Bellevue City Code.

What are the affordability requirements for the MFTE?

A minimum of 20 percent of all project dwelling units must be rented to eligible households and remain affordable for at least 12 years from the date of initial occupancy, as follows:
 

Eastgate, Crossroads, and Wilburton: 

  • 10% of all dwelling units in the project affordable to household incomes 60% or less of the King County median income, adjusted for household size; and
  • 10% affordable to household incomes 70% or less of the median.  
  • Any unit of 300 sq. ft. or less must be affordable to household incomes 45% or less of the median.

Downtown:

  • 20% of all dwelling units in the project affordable to household incomes 70% or less of the King County median income, adjusted for household size.
  • Any unit of 300 sq. ft. or less must be affordable to household incomes 45% or less of the median.

BelRed: 

  • 10% of all dwelling units in the project affordable to household incomes 50% or less of the King County median income, adjusted for household size; and
  • 10% affordable to household incomes 70% or less of the median.
  • Any unit of 300 sq. ft. or less must be affordable to household incomes 45% or less of the median.

 

Are there other rules associated with the MFTE?

The tax exemption...

  • is available for the entire residential component of the project – both affordable and market-rate dwelling units.
  • is not available for the land or for any non-residential component of the project (retail, commercial, office space, etc.). These will be taxed at the full assessed value.
  • takes effect the January 1 following the city’s approval of a final certificate of tax exemption.
  • will remain in place for a maximum of 12 years, provided the project remains in compliance with program requirements.
  • is transferable to a new property owner as long as the new owner maintains compliance with program requirements.

Are there any reporting requirements associated with the MFTE?

Tenants of the affordable units must be able to certify their income eligibility at time of initial occupancy and annually thereafter. To verify continued compliance with the program, by March 1 of each year after obtaining the final certificate the owner will submit to ARCH an annual report for all tenants of the affordable units.
 

2019 Annual Income Guidelines* and Monthly Rental Costs

 

Bedrooms

Household Size

45%

AMI

50%

AMI

60%

AMI

70%

AMI

Utility Allowance

Income

Rent

Income

Rent

Income

Rent

Income

Rent

 

Studio

1 person

$34,209

$855

$38,010

$950

$45,612

$1,140

$53,214

$1,330

$132

One

2 person

39,086

916

43,440

1,018

52,128

1,222

60,816

1,425

157

Two

3 person

43,983

1,100

48,870

1,222

58,644

1,466

68,418

1,710

192

Three

4 person

48,870

1,271

54,300

1,412

65,160

1,629

76,020

1,977

236

 

* Based on the King County/Seattle-Bellevue Metro Median Income (4 persons): $108,600

** Rental cost includes rent, utilities, one required parking space and other required charges. Utility allowance (right column) includes Electricity & Gas, Water-Sewer-Garbage, and Renter's Insurance.

Applications must be submitted to the Community Development Department prior to the issuance of a project's first building permit.

If the application is approved per City Code Section 4.52, the city will issue a conditional certificate of acceptance for tax exemption. The city will then assign A Regional Coalition for Housing (ARCH) to develop a tax exemption contract and a regulatory agreement for execution by the project owner and the city manager. The regulatory agreement will be recorded as a covenant running with the land.

When the housing units are ready for occupancy, the applicant will submit to the Community Development Department (CD) an application for a final certificate of tax exemption, demonstrating that the project complies with all of the requirements of the program. If the Community Development Director approves the application, the city will issue a final certificate to the King County assessor, who will exempt the residential improvements from the taxable value of the property.

Application Documents

Bellevue has two downtown apartments participating in the MFTE program, adding over 60 moderately priced apartments in a range of sizes. If you are looking for an affordable apartment in Bellevue, other resources include: