The city of Vancouver is hoping to expand the eligible areas for developers to receive a tax exemption on affordable housing developments.
Currently, the program only applies to developments in downtown Vancouver, the waterfront and along Fourth Plain Boulevard.
But the city hopes to expand the coverage area to include Fruit Valley, Uptown, the Highway 99 corridor, Southeast Mill Plain Boulevard corridor, Evergreen and Grand corridors, east Vancouver, and the Heights District — all areas zoned for multifamily housing and close to public transit, according to the city.
To receive the Multifamily Tax Exemption, developers must designate 20 percent of their units for households earning less than the area’s median family income for eight to 12 years — the duration of the exemption.
“The city is proposing updates to: expand the program more equitably throughout the city, better incentivize housing density near transit, especially on bus rapid transit corridors, and create additional affordable housing,” Samantha Whitley, housing programs manager for Vancouver, said in an email.
The city says that modifying the tax exemption program will “promote development that creates more walkable neighborhoods and easy use of public transit” and “simplify the existing MFTE program,” according to a news release.
Whitley said the city worked with ECONorthwest, an economic consulting firm, to create the list of new eligible areas. A big focus for the proposed changes was being able to construct developments by public transit.
“By increasing the density of housing within ½-mile of transit, more people can access regularly running bus lines and decrease the need for individual automobile trips,” Whitley said. “In addition, additional housing units within particular neighborhoods will drive demand for more stores and services nearby.”
Lastly, the proposed changes will amend a rule that allows developers of market rate housing to receive the exemption if they provide a public benefit such as investing in a nearby park or street. Under the proposed changes, developers would pay the city 25 percent or 50 percent of the money they saved through the exemption, which would go fully toward affordable housing projects.
Whitley emphasized that the tax exemption program is a net benefit for the city, and adopting these changes will spur economic development in the area while addressing the affordable housing crisis.
“The value of MFTE projects currently exempt from property tax represents less than 2 percent of the property tax base and, after the exemption period, which lasts between 8-12 years, these projects are back on the tax rolls growing the tax base beyond what it would be without the program,” Whitley said.
City staff will host two public information sessions on the changes March 23 and are accepting public comments until April 21. The Vancouver City Council will vote on the final changes in mid-2023. More information on public engagement can be found at www.beheardvancouver.org/mfte.
