Everett approves changes to housing tax break program

Published 1:30 am Saturday, August 1, 2026

EVERETT — It will now be easier for housing developers to qualify for certain tax breaks within the city of Everett after the City Council voted Wednesday to expand the availability of a tax exemption program.

The city’s Multifamily Tax Exemption program, known as MFTE, works by offering partial property tax exemptions to developers that build housing within the city. Projects with affordable units earn developers larger tax breaks.

Wednesday’s vote expanded the footprint of the program, which was previously limited to large corridors like Evergreen Way and Everett Mall Way. Developers may now qualify for the tax breaks when building housing in most residential areas of the city.

It also reduced the threshold of units that developers would need to build to qualify for the tax exemption. Previously, Everett required builders to construct 16 units to qualify; that number dropped to four.

The city doesn’t lose tax revenue from the program because the cost of the tax breaks are shared across other property owners across the city, who temporarily pay the share of the levy that would have been paid by the developer. Property owners pay about two cents per unit as part of the program. In 2025, that added up to about $25.78 on the average property owner’s yearly tax bill, according to a planning commission memo, supporting about 1,500 housing units throughout the city.

Building at least four market-rate units would qualify developers for an eight-year exemption on the property taxes levied on the property’s residential improvements. They would still have to foot the property tax bill for the land or commercial improvements.

To qualify for a 12-year tax exemption, 20% of the units in a development must be set aside for people with lower incomes. City law defines that to mean that 10% of the units must be affordable — meaning rental costs wouldn’t exceed 30% of a household’s income — to people earning less than 60% of the area median income, or about $69,060 per year for a single person. Another 10% must be affordable to people earning less than 80% of the area median income, about $92,080 per year for a single person. (The median family income in the Seattle-Bellevue metro area, in which Everett is included, is about $164,400).

Frank Hong, a special projects manager at the city, previously estimated that the changes to the MFTE program would add between 15 to 100 new housing units in the city each year because of the new regulations. Taxpayers would likely see an extra 30 cents to $2 on their annual property tax bills as a result.

City officials said they are also working on other possible changes to housing policy to encourage development and home ownership rates in Everett, a city with a majority renter population.

In a statement Wednesday, Everett Mayor Cassie Franklin wrote that the update to the MFTE law would encourage the building of more small apartments and other housing developments throughout the city.

“We want to use every tool in the toolbox to make Everett the best place to build housing and make housing attainable for all Everett families,” Franklin wrote.

Since the MFTE program was first implemented in 1999, it has supported the construction of about 3,700 housing units throughout the city, Hong previously said.

Will Geschke: 425-339-3443; william.geschke@heraldnet.com; X: @willgeschke.