Thursday, October 1, 2026
The Olympia City Council plans to revisit the Multifamily Tax Exemption (MFTE) Program and establish performance metrics for all affordable housing incentives following public criticism.
The city council approved two market-rate apartment projects under the program during a meeting on Monday, Nov. 3.
The first, Cottage Apartments by Fourth Street’s Cottages, LLC, is going to bring 58 market-rate units to 414 and 422 Franz Anderson Road SE in the east side of Olympia.
The second project, Legion and Jefferson by Urban Olympia 16A, LLC, is going to add 95 market-rate units above ground floor commercial space at 421 Legion Way SE downtown. The units should become available in September 2027.
Under Olympia’s revised MFTE program, both developers would pay a fee in lieu of constructing affordable housing units, equal to 5% of their anticipated property tax exemption. Fourth Street’s Cottages, LLC, would contribute about $43,477 while Urban Olympia 16A, LLC would pay about $108,000.
The fees would go toward the city’s affordable housing fund.
Olympia resident Jim Lazar called the current structure of the MFTE “reverse Robin Hood.”
“These would give two millionaire developers … about $3 million in subsidies for their projects,” said Lazar, who has contributed editorials to The JOLT News in the past.
He added the MFTE program is not a solution to any housing problem, as it is taxing retirees and working families, including families who are recipients of the Supplemental Nutrition Assistance Program (SNAP), to subsidize wealthy developers.
“The trifling amount that these developers will pay to the city to support affordable housing, about $150,000, is not enough to build one affordable housing unit,” said Lazar, as he urged the city council to reject applications and eliminate the MFTE program.
He also argued the city has “no shortage of market-rate housing,” citing more than 2,000 apartments currently under construction in the Olympia, Lacey and Tumwater area.
According to Larry Dzieza, the program shifts tax responsibilities, “making taxpayers pick up (the) tax bill even for buildings that have $4,000 a month water view units.”
He also questioned the program’s development effectiveness, saying claims “market-rate housing needs such incentives” are not supported by evidence, based on a state study by Jay Lark.
Dzieza noted that Lacey grew faster than Olympia in 2023, with only one MFTE development, while Olympia had 11 and Tumwater had none.
Dzieza also questioned the lack of transparency in the process for applying and approving the MFTE to developers.
“When did the developers let the city know that they intend to apply for the MFTE program, and when did you share that with the public? I find no indication of an MFTE being brought up for approval until I saw it in tonight’s agenda," he said.
Ronda Larson Kramer said studies across the state show MFTEs “do not increase housing supply” and mainly “enhance developer profit margins while shifting the tax burden to regular homeowners, renters, and small landlords.” She said the program only reduces developer taxes by $3 million without providing affordable housing benefits.
She recommended alternative approaches for more affordable housing like inclusionary zoning, community land trusts and nonprofit partnerships.
Lisa Riner, another resident, said many in the community are already struggling financially.
“People are having trouble paying their bills … and here you are, more taxes to the vulnerable. It does not make sense," she said.
John Newman, a longtime Olympia resident, added that the MFTE's original intent — encouraging downtown housing — has drifted from its public purpose.
“Very few affordable units have been built. It is all primarily market rate,” he said. “We should only approve tax credits for housing that supplies either affordable or low-income units.”
Council member Jim Cooper advocated for a data-driven approach to the MFTE program. He suggested creating clear performance indicators that would guide the program’s implementation.
When the council last revisited the program, Cooper said, one unresolved question was how to measure its performance.
“We have built a big toolbox of housing tools, but we need to define the indicators for when to roll back the multifamily tax credit," he said. "We should have a deliberate discussion about how the program is helping or hurting the community and what the right path forward looks like.”
He pointed to recent data showing Olympia’s rental vacancy has risen to about 5%, a level he considered healthy, and a Thurston County study identifying a shortage of more than 12,500 housing units across all income levels.
Cooper said the data highlight the importance of setting clear performance indicators to guide housing policy decisions.
“If vacancy rates or other measures reach certain thresholds, then we will shutter that program until the indicators show that we need it again," he said.
He asked the city council to have a conversation that focuses not only on whether people want the program, but also on what housing data and community needs actually show.
Councilman Clark Gilman appreciated Cooper’s call for more discussion.
He proposed Olympia begin evaluating each tax exemption application individually rather than automatically approving all qualifying projects. He said the approach is allowed under state law and used in other cities.
Gilman also wants public reporting on exempted properties, including data on rents, performance and estimated tax burden on median households.
He said he could not find on the Olympia website a list of currently exempted projects.
“We are flying blind when we just approve them by form. Other cities evaluate the merits of individual proposals — we might consider doing the same," Gilman said.
He noted MFTE projects operate through a “tax shift,” where cost is distributed among other property owners.
“It is reasonable to ask what that costs the median household," Gilman said.
City Manager Jay Burney said staff is working on developing comprehensive performance measures for affordable housing incentives and potentially discussing the MFTE program’s future during next year’s planning.
However, he recommended approving the current applications, saying the developers had proceeded “in good faith” under the existing program.
The city council approved both MFTE projects, but agreed to revisit the program in 2026 as part of their policy review.
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Grailking
If housing is market rate then rely on the market and take your chances and your profit. G
overnment should not subsidize enterprises that have profit built in, such as fossil fuel companies or real estate developers. These public/private "partnerships" seem to mostly be ways for profiteers to get their snouts in the public funds trough to underwrite their projects while keeping profits for themselves.
Wednesday, November 5, 2025 Report this
BobJacobs
The next time someone mentions high property taxes, just let them know that part of the reason is that we are being forced to pay the property taxes of wealthy developers.
Bob Jacobs
Wednesday, November 5, 2025 Report this
Larry Dzieza
Why the delay in stopping a program that is bleeding the public and achieving so little in public benefit?
While we wait for the Council to study, we are open to being hit up again for a head slappingly inefficient program. This program provides one nickel of benefit for each dollar we pay in higher taxes.
As someone who was deeply involved in stopping the city from increasing our taxes for a Regional Fire Authority, I can imagine what the voters would say if they were given the chance to vote on this program.
I am certain that if voters were asked to pass a property tax increase that provided 95% the revenue to millionaire developers and 5% for affordable housing -- like this program does -- it would get "Yes" votes in the single digits.
Think about how easy it would run a campaign against that level of inefficiency.
The council doesn't need to wait for a study to stop such an inefficient and transparently obvious tax shift from the richest to everyone else.
Bottom line: The City should declare a moratorium on any further approvals of the MARKET RATE MFTE.
P.S. For the record, the state study was conducted by JLARC (Joint Legislative Audit and Review Committee), and it is correctly pronounced as "Jay Lark".
Wednesday, November 5, 2025 Report this
mhjwilson
It would be best to simply abolish the zoning law and let property owners build as is done in Houston. If that can't be done then cut the mandatory lot size in half. Please remember zoning code are racist in origin.
Thursday, November 6, 2025 Report this
Yeti1981
There is understandable concern in the community about how Olympia encourages housing development and how the Multifamily Tax Exemption (MFTE) program fits into broader affordability goals. The public wants to be sure that our housing policies are not only fair, but effective, transparent, and aligned with both current market conditions and long-term needs. Those concerns deserve respect. At the same time, it is important that our decisions be guided by accurate information about how the housing market works and what the data shows is necessary to keep Olympia livable for working families.
Olympia, like the rest of Thurston County, continues to face a significant housing shortage. The county-wide housing needs analysis identified a gap of more than 12,500 housing units across all income levels. This is not a theoretical number. It is the reason renters have faced sharp price increases over the past decade. When the supply of homes is lower than the number of people and families who need them, prices rise. When supply increases, rent pressures stabilize. This pattern has been documented repeatedly in Olympia’s own rental market data.
Over the last few years, as more housing came online, Olympia’s rental vacancy rose to around five percent. That is the level economists generally consider “healthy,” meaning there is enough choice in the market to prevent bidding wars and rapid rent escalation. During that same period, rent growth slowed dramatically compared to prior years. That stabilization did not happen by accident. It happened because Olympia allowed and encouraged new housing to be built. The MFTE was one of the tools that made that possible.
The MFTE does not exist to reward developers. It exists to help projects pencil in a mid-sized market where construction costs have risen faster than rents. Without a tool that helps balance those costs, many projects simply do not proceed. When projects do not move forward, fewer homes are built, and scarcity returns. When scarcity returns, rents rise again. The question before us is not whether developers should pay taxes. It is whether Olympia wants to maintain the level of housing production necessary to keep rents from rising faster than wages.
Concerns about the MFTE’s impact on the property tax system also deserve clarity. Washington’s tax structure does distribute the cost of exemptions across the tax base. But failing to build enough housing also raises property taxes, because rising rents lead to higher assessed values for both landlords and homeowners. Allowing housing supply to fall behind demand is, historically, one of the surest drivers of property tax increases. The MFTE is one of the few tools that prevents that dynamic by keeping supply aligned with population growth.
For those who believe the MFTE should produce more affordability directly, it is worth noting that Olympia has already revised its program to include an in-lieu contribution to the city’s affordable housing fund. That fund helps create homes that are income-restricted and protected from market fluctuations. In other words, the MFTE now supports both market-rate and affordable housing strategies, which is consistent with best practices used across the country.
Reasonable people can differ on what the thresholds, performance metrics, or application processes for the MFTE should be. A discussion about transparency, data reporting, and public understanding is healthy. But it is important not to lose sight of the larger truth supported by both local conditions and national research. When housing supply is restricted, affordability worsens. When communities make it possible to build a range of housing types at a pace that meets demand, affordability improves over time.
If the shared goal is to ensure Olympians of all income levels can continue to live, work, and retire here, then our policies must protect our ability to keep building housing. The MFTE has been one of the few successful tools to help do that. Rather than eliminating it, the path forward is to refine it with clear performance indicators, public reporting, and predictable criteria. That approach balances accountability with continued housing production, which is essential for keeping Olympia attainable for the community that calls it home.
Thursday, November 6, 2025 Report this
JW
How about we stop regulating new construction to death? Because this would require giving back bureaucratic control it will never be considered.
Let's stop all subsidies---market rate and affordable housing. City government is not responsible for "affordable housing".
Thursday, November 6, 2025 Report this
36098501
When the MFTE was codified in 1995, it made no mention of affordable housing. It doesn’t take long to forget the characteristics of Olympia’s downtown and the mix of housing options that existed at that time. Olympia’s downtown core was struggling to survive economically and had been for a long time. The MFTE was a tool intended to incentivize economic development and the creation of dense, multifamily housing in target areas identified by the City.
A decade ago in 2015, 83% (1263 units) of downtown housing was designated as low income. Of that amount, 56% (713 units) was government subsidized housing. 10% was designated as market rate.
There are Council Members and people that spoke at this Council meeting that know this history well, but choose to create a divisive narrative as if they don’t remember how we got here or their involvement in that process along the way.
Affordable housing was never the intent, or the expectation, of the MFTE. The City Council has unanimously passed every single MFTE that met the requirements set by the process the City follows – minus two votes from a Council Member that went on to make a political statement by creating their own personal rent exemption. The City process has been fully transparent
The City wanted investment in high density housing in certain areas of Olympia that hadn’t seen a nickel of investment in decades. The development density helped the City with the State Growth Management Act and avoid more suburban sprawl. The original objective was accomplished. No need for a costly study to prove causation. The building Investment happened which was exactly the City’s desired result.
It is time to do away with the MFTE as it has served its intended purpose. It is always preferable to see barriers and bureaucracy reduced rather than a direct benefit to any specific business or project.
As often happens in Olympia, the Council’s attempt to utilize the MFTE to incentivize something it wasn’t intended for – affordable housing – has led to unintended consequences and now political division. Members of the Council and some speakers are angry that the local building community accepted a property tax exemption that the City created as it didn’t result in “affordable” housing which the MFTE was not intended to do and doesn't require.
Many people in Olympia confuse “affordable” housing for government subsidized housing. Rents deemed “affordable” by the City and HUD aren’t currently that far away from market rate rents in Olympia. This is due to Olympia’s $116,700 Median Family Income. (Affordable = 80% HUD Median Income * 30% /12) Roughly $1800-$2200 a month depending on household size. I think many people in this conversation really want subsidized housing which the MFTE has nothing to do with and will never help create.
Olympia has a shortage of every type of housing – even market rate housing – by thousands of units. The shortage explains the continuation of high rents at the same time new inventory is coming onboard. This is the result of decades of Council decisions - zoning, impact fees and bureaucratic complexity to name a few. Even non profits utilizing free land, volunteer labor and subsidized materials can't get some affordable housing projects through the process.
Thursday, November 6, 2025 Report this
Westside2
Can’t wait for Jim Cooper to get out of government. No more studying Jim. It’s time for accountability and action. You have wasted so much taxpayer money with endless recommendations to study it further and never making a decision. Same with your work as ORCAA’s chair- the most uninterested board I have ever seen letting them run a toxic workplace and rob businesses and citizens alike - for what ? So you can eat cake? Get out of the culture war & get to good governance. I’m sorry I ever voted for you
Thursday, November 6, 2025 Report this
longtimeresident
The MFTE program is a joke........You just haven't figured that out yet.
Thursday, November 6, 2025 Report this
Kruz81
You want to know my solution to affordable housing. It's called having a job, working and getting a salary. You might not be able to afford housing in the city of your choosing you might have to live in another one. It's not like all of these cities around here are large or far apart. It also seems like buses run through a lot of places so people can take buses from their affordable housing in another city to Olympia or wherever it is they need to go.
Friday, November 7, 2025 Report this
LindaD
I own one simple, small affordable housing unit in Olympia. The property taxes went up 22% but the city caps rent at less than 10%. Y
et I get to pay to cover the costs of corporate developers who suck the wealth out of our community, cover our land with endless apartments, which limit ownership opportunities for our local people, while building what amounts to no more than worker storage units, not real local housing for our real people.
There are some very thoughtful and knowledgable comments here. People are paying attention. Even so, to put it plainly, we need to shut the corporate builders down like the rabid dogs they are.
Friday, November 7, 2025 Report this
36098501
In the downtown core, the developers, architects and builders involved in creating Multi Family Units have almost entirely been local, long time community members.
Don't hold me to this but I think all the land utilized for these projects was previously parking lots, old state office buildings or structures in disrepair - except for maybe the Les Schwab site and a couple homes removed recently on Union. My point is that these units are additive to the housing pool and not replacing or removing existing multi family housing.
The large Multi Family projects (over 75ish units) are generally development groups outside of Thurston County that one might consider Corporate. The investor base and financial necessary for projects over $25mm gets dramatically more complicated and above the capacity of the local investor groups and the ocal banking base.
Friday, November 7, 2025 Report this
Mugwump
Granted, I don't know everything there is to know about this specific issue. But the one thing I learned from over twenty years in service to a local government is that real estate interests have an outsized influence on local politics. There is a balance to be found between the economics of developing market rate housing which can be highly profitable and providing affordable housing. The threats of developers to not develop if they are required to either pay what they owe in property taxes or offset those taxes by building affordable housing are laughable. If there is a profit to be made a canny businessperson will find a way to make it. As surly as the sun will rise in the East tomorrow.
Monday, November 10, 2025 Report this