Multi-Family Tax Exemption Program

The City of Vancouver provides a unique opportunity for developers to assist in meeting the community needs for additional housing in designated residential target areas across the city. The Multi-Family Housing Tax Exemption (MFTE) Program, which is authorized under state law (RCW 84.14) and codified in Chapter 3.22 of the Vancouver Municipal Code, allows for an 8 or 12-year tax exemption for the approved value of newly constructed or rehabbed residential units.

The Washington State Department of Commerce has completed the 2023 statewide impact report for the Multifamily Tax Exemptions (MFTE) program. To review the report, follow this link to the 2023 Department of Commerce MFTE Report.

Program Updates

On July 3, 2023, following a public hearing and unanimous vote, the Vancouver City Council adopted MFTE ordinance amendment M-4416.

The primary changes to the ordinance included:

Expanding the program to new target areas of the City.
Eliminated negotiated public benefit elements.
Added a fee-in-lieu of income-based units option that prioritizes higher density development
Replaced the current income-based options with a 12-year option under which 20% of the total project units are restricted to households earning 80% or less of the median family income
Added an 8-year ownership option
Added an option to renew income based projects for an additional 12 years
Add a 5% (+ CPI factor) annual rent cap increase following the expiration of income-based exemptions
Updated application fees

On October 2, 2023, following a public hearing and unanimous vote, the Vancouver City Council adopted MFTE ordinance and resolution amendments M-4420 and M-4247.

The primary changes to the ordinance include:

Clarifying regulations for the ownership option
Adding program definitions and clarifying language to ambiguous sections of the code
Correcting the Mill Plain Target area boundry map
Provided an administrative plan and procedure guideline for the use and management of MFTE Fee-in-Lieu funding

Exemption Options

The current ordinance, effective July 3, 2023, allows for the following options:

An 8-year exemption is available for market-rate and ownership projects.
A 12-year exemption is available for income-based projects under which 20% of the total development units are restricted to households earning 80% of median family income or less.

Application Process

The Multi-family Tax Exemption program application for project developers is available online through Neighborly.

The required application fee includes the following:

Base Fee – $5,000
Per Unit Fee – $75 per unit

A $500 annual monitoring fee applies to approved projects during the exemption period.

Upon submittal of the completed application through Neighborly and payment of fees to the City of Vancouver, the application will be reviewed. The conditional certificate review process takes approximately 90 days from the time a complete application is received.