ORD 23-964 - Expanding the MDU Limited Property Tax Exemption ProgramORDINANCE NO.23-964
AN ORDINANCE of the City of Federal Way, Washington, relating to
expanding the City's multifamily dwelling unit limited property tax
exemption program to the Community Business zone; amending
FWRC 3.30.010, 3.30.020, and 3.30.030 (Amending Ordinance Nos. 03-
438, 09-600, 09-606).
WHEREAS, in 1995 the Washington State Legislature adopted Chapter 84.14 RCW, to
encourage increased residential opportunities in cities required to plan under the Growth
Management Act, by providing for special property tax valuations for eligible multifamily housing
in targeted urban, residential areas; and
WHEREAS, Chapter 84.14 further authorizes cities with a population of at least fifty
thousand to adopt procedures to implement the special property tax valuations; and
WHEREAS, in 1998 the Federal Way City Council adopted the Federal Way
Comprehensive Plan, to implement the planning requirements of the Growth Management Act,
Chapter 36.70A RCW ("GMA"); and
WHEREAS, by Resolution 02-380 and Ordinance 03-438, the City designated the City
Center Core and City Center Frame as a "residential targeted area" pursuant to RCW 84.14.040
and adopted implementing provisions in FWRC; and
WHEREAS, in 2022, the City hired Heartland, LLC to look at measures the City could
take to improve housing production in the City; and
WHEREAS, in 2023, Heartland, LLC recommended nine actions for the City to take to
improve housing production in the City; and
WHEREAS, one of the recommended actions was to expand the Multifamily Dwelling
Unit Limited Property Tax Exemption ("MFTE") program to include the Community Business
("BC") zone; and
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WHEREAS, the BC zone is described in the City's Comprehensive Plan as "allowing a
broad mix of uses, including general, specialty, and service retail; commercial; office;
commercial/residential mixed -use; and supportive uses"; and
WHEREAS, the BC zone envisions mid -rise (three to seven stories), high quality
developments containing a vibrant and compatible mix of well -integrated and designed pedestrian -
oriented and auto -oriented uses; and
WHEREAS, the Council finds that the BC zone meets the required criteria in RCW 84.14
for designation as a residential targeted area; and
WHEREAS, the Council desires to expand the City's MFTE program to include properties
in the BC zone by designating the BC zone as a residential targeted area, and adopting applicable
code amendments to implement such designation.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
WASHINGTON, DO ORDAIN AS FOLLOWS:
Section 1. Findings. The City Council of the City of Federal Way makes the following
findings:
(a) The recitals set forth above are hereby adopted and restated as findings of fact.
(b) The BC zone is a compact identifiable district where urban residents may obtain a
variety of products and services. The BC zone is compact and identifiable because it closely
follows the Highway 99 corridor in the City, and does not extend far from that narrow corridor.
The BC zone is also identifiable because it is a single zone. The BC zone provides a wide variety
of products and services, including all types of retail, commercial, office, mixed use, and other
supportive uses.
Ordinance No. 23-964 Page 2 of 7
(c) The BC zone contains several existing business establishments, including shops,
offices, banks, and restaurants.
(d) The BC zone contains adequate public facilities including streets, sidewalks,
lighting, transit, water, and sewer.
(e) The BC zone contains a mixture of uses and activities including housing, recreation,
commercial, and office.
(f) The BC zone lacks sufficient available, desirable, convenient, and affordable
residential housing, especially of the type and character desired in the zone, to meet the needs of
the public who would be likely to live in the BC zone if such residential housing were available.
(g) Providing additional housing opportunity including affordable housing in the BC
zone will assist in providing additional desirable residential units., including housing units, help
the City reach its GMA housing targets, will attract and maintain an increase in the number of
residents in the BC zone, and help to solve the problems of urban sprawl by focusing urban
development in a discreet area.
Section 2. Conclusions. Pursuant to RCW 84.14, and based upon the recitals and findings
set forth in Section 1, the Federal Way City Council makes the following Conclusions of Law with
respect to the criteria necessary for adoption of the BC zone as a "residential targeted area":
(a) The BC zone is an urban center.
(b) The BC zone lacks sufficient available, desirable, and convenient residential housing,
including affordable housing, to meet the needs of the public who would be likely to
live in the urban center, if the affordable, desirable, attractive, and livable places to live
were available.
Ordinance No. 23-964 Page 3 of 7
(c) The providing of additional housing opportunity, including affordable housing, in the
BC zone, will assist in achieving one or more of the stated purposes of Chapter 84.14
I WAV
Section 3. FWRC 3.30.010 is hereby amended to read as follows:
3.30.010 Purpose.
As provided for in Chapter 84.14 RCW, the purpose of this article is to provide limited, 10-year
exemptions from ad valorem property taxation for qualified new multifamily housing constructed
in the community business, city center core and frame zones, in order to:
(1) Accomplish the planning goals of the Growth Management Act, Chapter 36.70A RCW, and
the City of Federal Way Comprehensive Plan, specifically Goals CCP 9 and 10; and/or
(2) Encourage residential opportunities, including affordable housing, within the community
business, city center core and frame residepAia' targeted area-; and/or
(3) Stimulate new construction of multifamily housing in the community business, city center core
and frame to increase housing opportunities; and/or
(4) Assist in directing future population growth into the community business. city center core and
frame, thereby reducing development pressures on single-family residential neighborhoods; and/or
(5) Achieve development densities that are more conducive to transit use in the community
business, city center core and frame; and/or
(6) Promote community development and community business, city center core and frame
revitalization, in fulfillment of the Comprehensive Plan. City _.______ " . '______"
(Ord. No. 09-606, § 1, 3-17-09; Ord. No. 03-438, § 2, 2-18-03. Code 2001 § 14-230.)
Section 4. FWRC 3.30.020 is hereby amended to read as follows:
3.30.020 Definitions.
Ordinance No. 23-964 Page 4 of 7
In construing the provisions of this article, the following definitions shall be applied:
"Affordable housing" means the definition provided for in RCW 84.14.010.
"Assessor" means the King County assessor.
"Director" means the director of the Federal Way community development sefviees department,
or any other city office, department or agency that shall succeed to its functions with respect to
this article, or his or her authorized designee.
"High cost area " means the definition provided for in RCW 84.14.010.
"Household" means the definition provided for in RCW 84.14.010.
"Low-income household" means the definition provided for in RCW 84.14.010.
"Moderate -income household" means the definition provided for in RCW 84.14.010.
"Multifamily housing" means a building or townhouse having four or more dwelling units
designed for permanent residential occupancy.
"Owner" means the property owner of record.
"Permanent residential occupancy" means multifamily housing that provides either rental or
owner occupancy for a period of at least one month. This excludes hotels and motels that
predominantly offer rental accommodation on a daily or weekly basis.
"Residential targeted area " means the community business, city center core and frame zones, as
designated by the city council pursuant to this article.
(Ord. No. 09-606, § 1, 3-17-09; Ord. No. 09-600, § 17, 1-6-09; Ord. No. 03-438, § 2, 2-18-03.
Code 2001 § 14-231.)
Section 5. FWRC 3.30.030 is hereby amended to read as follows:
3.30.030 Residential targeted areas — Designation.
Ordinance No. 23-964 Page 5 of 7
(1) Pursuant to this section, the Federal Way city center and Community Business zone, consisting
of the ttFeasparcels zoned CC-C_ aPA-CC-F, and BC. are -is--designated as a "residential targeted
area."
(2) If a part of any legal lot is within the residential targeted area, then the entire lot shall be deemed
to lie within the residential targeted area.
(Ord. No. 03-438, § 2, 2-18-03. Code 2001 § 14-232.)
Section G. Severability. The provisions of this ordinance are declared separate and
severable. The invalidity of any clause, sentence, paragraph, subdivision, section, or portion of this
ordinance, or the invalidity of the application thereof to any person or circumstance, shall not affect
the validity of the remainder of the ordinance, or the validity of its application to any other persons
or circumstances.
Section 7. Corrections. The City Clerk and the codifiers of this ordinance are authorized
to make necessary corrections to this ordinance including, but not limited to, the correction of
scrivener/clerical errors, references, ordinance numbering, section/subsection numbers and any
references thereto.
Section 8. Ratification. Any act consistent with the authority and prior to the effective date
of this ordinance is hereby ratified and affirmed.
Section 9. Effective Date. This ordinance shall be effective thirty (30) days after passage
and publication as provided by law.
PASSED by the City Council of the City of Federal Way this 8th day of August, 2023.
[signatures to follow]
Ordinance No. 23-964 Page 6 of 7
CITY OF FEDERAL WAY:
J ERALL, MAYOR
ATTEST:
S PI ANIE COURTNEY, C, CITY CLERK
APPROVED AS TO FORM:
2>gcj-k_
J. RYAN CALL, CITY ATTORNEY
FILED WITH THE CITY CLERK: 07/12/2023
PASSED BY THE CITY COUNCIL: 08/08/2023
PUBLISHED: 08/11/2023
EFFECTIVE DATE: 09/10/2023
ORDINANCE NO.: 23-964
Ordinance No. 23-964 Page 7 of 7