The Committee of the Whole held a work session focused primarily on proposed updates to Bellingham's Multi-Family Tax Exemption (MFTE) program, designed to incentivize affordable housing development. Long Range Planning Manager Chris Behee presented comprehensive amendments aimed at expanding both the 8-year market rate program to all urban villages and improving the viability of the 12-year affordable housing program, which has produced zero units since its inception. The proposed changes would adjust income requirements from the current complex structure to a flat 80% Area Median Income (AMI) threshold, add a new 20-year homeownership program, and allow existing 8-year projects to extend for additional 12-year periods if they provide affordable units. The work session comes after Council direction from September 2024 following an ECOnorthwest market study showing current construction conditions are "super challenging" for multifamily housing development. Staff research indicates median market rents in Bellingham currently range from 70-100% AMI, suggesting the current 12-year program requirements may be too restrictive to attract developers while still providing community benefit. The meeting also featured a celebration of retiring Public Works Superintendent Marty Gray's 30-year career, with Gray delivering heartfelt remarks about the city as an employer and Council members expressing appreciation for public works' critical but often unrecognized contributions to city operations. #
Committee of the Whole
Executive Summary
Key Decisions & Actions
& Actions **Motion Carried (6-0, Hammill abstained):** Council Member Stone moved to designate Council Member Hammill as the Downtown Partnership liaison, replacing Stone who will continue with Sustainable Connections. **No formal action taken on AB 24467** - This was an information-only work session. Staff will return in April with a public hearing and consideration of a formal ordinance incorporating the proposed MFTE program changes. **Staff recommendation endorsed through discussion:** Council members expressed general support for the proposed MFTE amendments, with requests for additional information on displacement provisions, exit strategies for developers, and specific rent data from current MFT projects. #
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**April 2025:** Staff will return with a public hearing and formal consideration of an ordinance incorporating the proposed MFTE program amendments. **January 1, 2032:** State law sunset date for new MFTE exemptions. City must evaluate program performance and determine future direction, potentially including sunset of 8-year program everywhere except Downtown and Old Town if sufficient housing production is achieved. **Ongoing monitoring:** Staff will track program performance metrics including participation rates, citywide vacancy rates, and affordability outcomes to inform future adjustments. **Middle Housing Interim Ordinance:** Expected at next Council meeting to address concerns about historic preservation and adaptive reuse incentives before MFTE expansion takes effect. **Additional information requested:** Staff will provide rent data from current MFT projects, clarification on developer exit strategies and penalties, and more details on displacement assistance provisions. #
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