On Tuesday, July 28, 2026, at 7 p.m., the Redmond City Council held a study session with all council members and Mayor Bernie in attendance. The agenda covered: (1) 2026 amendments to Redmond Municipal Code 3.38, the multifamily housing property tax exemption (MFTE); (2) a budget process update including the utility rate study, long-range financial strategy, and fiscal policies; and (3) council talk time. No separate written agenda or minutes accompanied the transcript.
Good evening. I'm calling to order this Redmond City Council study session held on Tuesday, July 28th, commencing at 7 p.m. All council members and Mayor Bernie are in attendance. There are three items on tonight's agenda the 2026 amendments to Redmond Municipal Code 3.38 multifamily housing property tax exemption, a budget process update, including our rate utility study, long-range financial strategy, and fiscal policies, followed by council talk time. The first item on the agenda is the 2026 amendments to Redmond Municipal Code 3.38, multifamily housing property tax exemption. Carol Hallen, Director of Planning and Community Development, will introduce this item and her team. Welcome. Thank you so much. Councilmember Stewart. And that's why we're here this evening. So responses to the questions that were asked as were are part of your packet this evening. And I also sent an email earlier today if those of you had an opportunity to read it, where we provided responses to additional questions that were raised. Thank you, Carol. Hello, council. As introduced last month, the proposed amendments would add a 12-year extension option to our existing MFTE programs to three residential targeted areas. Merrymore, mixed use, and overlake. The proposed amendments would not impact the downtown faith or neighborhood residential targeted areas. And importantly, this would be a tool on top of the existing MFTE programs. It would not replace any program. Based on a 2026 analysis conducted in partnership with the Regional Coalition for Housing Arch, these extensions will improve development feasibility. We conducted the MFTE program analysis in 2026 for two key reasons. The first is that we promised our development partners during the Redmond 2050 comprehensive plan update that we would. And two, there was a variety of different legislative items that came and offered different tools for the toolbox of local jurisdictions. If adopted, the 12-year extension would be available to qualifying developments this year. Notably, the exemption does not trigger until the building is complete and has a certificate occupancy, then starts the following year. Council members asked background questions about the MFTE program and about the 2023 pilot program, responses to which are in your packet. In addition, as Carol noted, we uh sent out a collection of eight or so responses to Councilmember Parsi's questions about the program. And tonight we are seeking council direction on the proposed amendment so that staff can prepare an ordinance for council action at a future business meeting. And with that, I turn it back to Council President Stewart. Thank you so much. Much appreciated. Council, who has the first question or comment on this item. Councilmember Procrea. Thank you for coming back to us with the with the matrix. Uh I'm just looking at the first item, um, which was the question I raised on the 20-year 20-year option. And um I'm looking at the the last sentence that we didn't consider it because we want additional guidance by the State Department of Commerce or other legislative revisions. Uh I was just wondering if you could provide more context on what guidance may be provided by the Department of Commerce. Um, just more clarification on that. Thank you. Absolutely. So the different MFTE programs that are authorized in the revised code of Washington typically have baseline minimum requirements, both for the set aside of affordable units and for the levels of affordability. In some cases, like with the eight-year baseline program, there is no set aside requirement for affordable housing at all. Part of the recent legislative uh package that implemented a 20-year TOD MFTE program. The way that the language was written and organized into the existing code is such that we are not sure if local jurisdictions have the authority to adopt deeper levels of affordability, more stringent affordability requirements associated with that program. Notably, other MFTE programs do have the formatting in the language such that local jurisdictions are clearly authorized to adopt more stringent affordability requirements. Some folks interpret it one way, some folks the other way, based on legal counsel and just the availability of our timeline. We do not need to adopt anything until the end of 2029. We felt it would be prudent to pause on this item and not say no, but just say not at this moment. Thank you. Councilmember Kritzer.