Legislature Passes New Tax Incentives for Multifamily Housing

The legislature has sent to the governor a bill to expand tax credits for multi-family housing. Currently, a city with a population of 30,000 may offer a ten-year property tax exemption to new, rehabilitated or converted multifamily housing projects. Engrossed Second Substitute House Bill 1910 will lower that threshold to 15,000 in most counties to and 5,000 in the largest counties (King, Pierce, Snohomish, Kitsap, Thurston and Clark). The legislature also made some changes to the program. First, it limited the tax exemption to 8 years, but allows it to expand to 12 years if the developer includes at least 20 percent of the units as affordable housing.

The bill also adds new reporting requirements for developers and the cities. Developers must provide data to the city annually including the total number of units developed, total cost of each unit, monthly rental or sale amount of each unit, income of each renter at occupancy and the first homeowner of any unit sold. Cities will be required to report aggregate the data it collects from developers and report that information to the state.