The Tacoma City Council voted on October 7, 2025 to approve several Tacoma Municipal Code updates to the Multi-Family Tax Exemption Program (MFTE) program. The updates aim to ensure the MFTE program continues to enhance housing density, expand affordable housing, bolster housing stability for lower income renters, and further nurture economic development and investment in Tacoma. The changes to the program will go into effect on November 7, 2025.
“This update to the MFTE program began back in 2024 within the Government Performance and Finance Committee. Our goal was to evaluate the benefits our community receives from the program as part of a three-year review required with the last MFTE change,” said District 1 Council Member John Hines, who led the program review and updates. “As part of that review, I met with community stakeholders to learn more about their views of this program. Their message was clear: the MFTE is an important tool for our development community, and economic conditions are not ripe for major changes. In light of this feedback, I am proud to continue the MFTE program with some of the changes we are proposing. The adjustments we have made will help ensure housing stability for our lower income residents, continued economic investment in our city, and more housing for our residents.”
“As the Chair of the Economic Development Committee, I believe that the MFTE program is a valuable tool for promoting growth in our city,” said Deputy Mayor Kiara Daniels. “I am especially pleased to see the City Council focus on ensuring the MFTE contributes to housing affordability when properties apply for an extension. The MFTE program has changed Tacoma’s urban landscape in vital ways, and I can’t wait to see development continue to flourish in the years ahead.”
“We took a thoughtful approach to updating the MFTE program because it’s important that it truly supports families and individuals who rely on affordable housing,” said At-Large Council Member Olgy Diaz. “Allowing people who qualify for income-restricted housing to remain in their homes should their income modestly rise helps prevent people from suddenly losing access to safe and stable housing. This is an important step, but we also know we need to keep listening and learning from the community to make this program even better over time.”
“The updates to the MFTE program reflect a commitment to using every tool we have to expand affordable housing and support economic development in Tacoma,” said District 2 Council Member Sarah Rumbaugh. “This is one piece of our broader work to respond to the housing needs in Tacoma. I appreciate the collaborative work that shaped these amendments, especially the proposal from Council Member Sadalge to prioritize condos and homeownership. Supporting long-term housing stability means offering more pathways for people to own a home and stay rooted in their communities.”
“I am grateful to my peers for supporting a version of this ordinance that strengthens access to homeownership,” said District 4 Council Member Sandesh Sadalge. “Preserving tax incentives for owner-occupied units in mid-scale developments is not just smart policy, it is a direct investment in the stability of our communities. This is how we create real pathways to homeownership for workers, families, and seniors who want to stay in the places they know and love. This also aligns with important work happening at the state level to open up more opportunities for condo development. With this update, we are continuing to use the MFTE program to build a more inclusive and affordable Tacoma.”
“With changes brought by Home in Tacoma and shifts in the housing market, it is the right moment to reflect on how the MFTE tool can better serve our residents,” said District 5 Council Member Joe Bushnell. “I am especially glad to see more flexible regulations that help individuals and families remain housed as they experience wage growth. That kind of stability makes a real difference in people’s lives. I also appreciate the focus on supporting homeownership through the eight-year exemption, which will open more doors for people to build equity and stay in our communities.”
The MFTE program provides limited 8, 12, or 20-year exemptions from ad valorem property taxation for multi-family housing in Residential Target Areas. In 2022, the City expanded eligible areas where the 12-year exemption is allowed to be used, lowered the household income level to 70 percent of Pierce County AMI as published by HUD each year, added a 20-year option for projects that provide permanently affordability, and adopted the option for extending an exemption for an additional 12 years if affordability is added. The citywide rezoning that occurred through Home in Tacoma further expanded mid-scale zoning and the areas in which the MFTE can be used.
The latest information on the MFTE will be posted here.