Tacoma: City Council Updates Multi-Family Tax Exemption Program Following Community Engagement and Government Performance and Finance Committee Review
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~ On October 7, 2025, the Tacoma City Council voted to approve updates to the Multi-Family Tax Exemption Program (MFTE) in an effort to enhance housing density, expand affordable housing, and support economic development in the city. The changes will go into effect on November 7, 2025.

The updates were proposed by District 1 Council Member John Hines, who led a three-year review of the program. Hines met with community stakeholders to gather feedback and ensure that the changes would benefit both the development community and lower income residents.

According to Hines, the feedback from stakeholders was clear: the MFTE is an important tool for development in Tacoma and major changes were not necessary at this time. As a result, the updates aim to maintain housing stability for lower income renters while also promoting economic investment in the city.

Deputy Mayor Kiara Daniels, who serves as Chair of the Economic Development Committee, expressed her support for the MFTE program and its role in promoting growth in Tacoma. She also highlighted the council's focus on ensuring that the program contributes to housing affordability when properties apply for an extension.

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At-Large Council Member Olgy Diaz emphasized the importance of supporting families and individuals who rely on affordable housing. The updates include measures to allow those who qualify for income-restricted housing to remain in their homes if their income modestly rises. This helps prevent sudden loss of access to safe and stable housing.

District 2 Council Member Sarah Rumbaugh praised the collaborative effort that went into shaping these amendments, particularly Council Member Sandesh Sadalge's proposal to prioritize condos and homeownership. Rumbaugh believes that offering more pathways for people to own a home will contribute to long-term housing stability.

Sadalge echoed this sentiment, stating that preserving tax incentives for owner-occupied units is not only smart policy but also a direct investment in community stability. He believes that this update will create more opportunities for workers, families, and seniors to own a home and stay rooted in their communities.

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District 5 Council Member Joe Bushnell also highlighted the importance of supporting homeownership through the MFTE program. He believes that the updates, along with the citywide rezoning through Home in Tacoma, will provide more flexible regulations and help individuals and families remain housed as they experience wage growth.

The MFTE program provides exemptions from property taxation for multi-family housing in Residential Target Areas for a limited period of 8, 12, or 20 years. In 2022, the City expanded eligible areas for the 12-year exemption, lowered the household income level to 70 percent of Pierce County AMI, added a 20-year option for projects that provide permanent affordability, and adopted an option for extending an exemption for an additional 12 years if affordability is added.

The latest information on the MFTE program can be found on the city's website. With these updates in place, Tacoma is committed to using every tool available to expand affordable housing and support economic development in the city.

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