The City proposes to create more affordable housing by changing the Multi-Family Tax Exemption (MFTE) structure. There will be a public hearing 3/16/2022. You can download the Agenda and Packet here, to see all the details: https://meetings.municode.com/PublishPage/index?cid=BREM&ppid=d33416d7-25d1-44e6-9d32-55b97fa53824&p=-1. Email Council. Attend the Public Hearing. Let your voice be heard.
For years the City has given developers of multi-family buildings two types of MFTE tax breaks, 8-year and 12-year. The 8-year tax exemption doesn’t require developers to provide affordable housing. In exchange for building rental units, the City waives all property taxes on the improvements — that is, the building’s owners only pay the land tax. Generally, this isn’t much. Spyglass Apartments, for example, is still paying taxes only on the land.
The 12-year tax exemption also taxes the property on its land value alone. BUT it requires that 20% of the units built be affordable. It now has two tiers of affordability, one for moderate-income, one for low-income. Low income is calculated as 80% of Average Median Income (AMI). For Kitsap County, the region we’re in, the AMI is around $94K. Moderate income is 80%-115%.
The City proposes to do three main things: 1) Eliminate the 8-year tax break. Bremerton is a hot market, buildings are going up without the MFTE (like the apartments behind Goodwill). It simply isn’t needed any more. 2) Eliminate the moderate income tier for people earning over $75,200. 3) Reduce the low-income percentage to 60% of AMI, much closer to Bremerton incomes. This means that people who are starting out, or re-starting, have a real shot at getting a decent, affordable roof overhead.
So look at the agenda packet. Look at the details. This is a tried and tested way to minimize risk for developers and provide a steady source of affordable housing for our people, the people of Bremerton. I’ve made a good-faith effort to describe Wednesday’s public hearing in plain language. Any errors in this post are mine.
At the 3/9 study session, a majority of Council voted to seek input from developers at the public hearing as to whether this will “pencil out”, i.e., can developers still make a profit should they choose to apply for the MFTE. Council does not plan to vote on the City’s proposal at the 3/16 public hearing, but to consider it at a future study session.