Multi-Family Tax Exemption

The Multifamily Tax Exemption (MFTE) program in Lakewood offers a property tax exemption to qualified multifamily housing properties. The tax exemption applies to the value of housing improvements for a period of 8 or 12 years, 12 years if at least 20% of residential units are low-income. 

Becky Newton
Economic Development Manager
6000 Main St. SW, 3rd Floor
Lakewood, WA 98499
(253) 983-7738

Email: BNewton
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About MFTE
Program Requirements
Application Process
After Construction
Important Links

About the Lakewood Multi-Family Tax Exemption (MFTE) Program

General Information

MFTE programs incentivize development of affordable housing by offering property tax exemptions to developers of multi-family housing. The MFTE program makes investing in Lakewood a more attractive option to developers, as it allows for a wider range of projects to be completed profitably. MFTE projects strengthen Lakewood’s communities by attracting affordable, high-quality housing choices that would otherwise not be constructed.

MFTE Program Requirements


The project must be located within a Residential Target Area (RTA), as designated in LMC 3.64.030 and shown on the City’s RTA map.


The project must include at least fifteen (15) units of multifamily housing within a residential structure or as part of a mixed-use development, or at least fifteen (15) additional multifamily units must be added to existing occupied multifamily housing.

Existing multifamily housing that has been vacant for 12 months or more may provide at least fifteen (15) units of new, converted, or rehabilitated multifamily housing.

Permanent Rental Housing

At least 50% of the space designated for multifamily housing must be provided for “permanent residential occupancy” (i.e., multifamily housing that provides either rental or owner occupancy for a period of at least one month, excluding hotels and motels that offer rental accommodation on a daily or weekly basis.)

Proposed Completion Date

New construction multifamily housing and rehabilitation improvements must be scheduled to be completed with final certificate of occupancy within three years from the conditional certificate date of signature by the City Manager.

Compliance with Guidance and Standards

The project must be designed to comply with the City’s Comprehensive Plan, building, housing, and zoning codes, and any other applicable regulations in effect at the time the application is approved.

  • Rehabilitation and conversion improvements must comply with the city’s housing code (LMC 18A.60.090).
  • New construction must comply with the International Building Code.
  • The project must also comply with any other standards and guidelines adopted by the City Council for the RTA in which the project will be developed.

MFTE Duration

The default length is eight (8) consecutive years beginning January 1st of the year immediately following the calendar year of issuance of the final MFTE certificate.

The MFTE length can be extended to twelve (12) consecutive years if the applicant commits to renting or selling at least 20% of the multifamily housing units as affordable to low- and moderate-income households.

For more detail regarding 12-year MFTE eligibility, see LMC 3.64.020.

MFTE Duration Requirements Table

8-Year MFTE12-Year MFTE
Minimum Affordability RequirementsNo minimumAt least 20% of units must be affordable to low- and moderate-income households (see figure 1: MFTE Program Income Eligibility Table)
Number of Units15 new units*15 new units*
Density of HousingNo minimum15 housing units/gross acre minimum
Extension12-year allowed**12-year allowed**
Sunset for Issuing ExemptionsDecember 31st, 2031December 31st, 2031

*Existing multifamily housing that has been vacant for 12 months or more does not have to provide additional units so long as the project provides at least fifteen units of new, converted, or rehabilitated multifamily housing.

**12-year extension may be allowed if 20% of units set aside as affordable to low income households (≤80% AMI) or if local 12-year requirements in place at the time of extension. See code section 3.64.020 (I) for more information.

Income Eligibility Table

MFTE Program Income Eligibility  
Family SizeExtremely-low Income (30% AMI)Low-Income (50% AMI)Moderate-Income (80% AMI)
Under state law, MFTE does not require the construction of extremely-low income housing units, only low-income and moderate-income.  Extremely-low income data is shown for comparative purposes only.
Income limits effective June 15, 2023.
Income limits will be updated as of June 2024.

Application Process

Apply for Business License

Multifamily Tax Credit Exemption applicants must have a valid, active business license to operate in the City of Lakewood.

Site Development Approval

Site development must be approved prior to submitting a MFTE application.

Apply for Conditional MFTE Certificate

The application procedure for requesting a conditional MFTE certificate is outlined in LMC 3.64.020 (G).

Apply for Building Permits

The Conditional MFTE Certificate must be approved prior to issuance of building permits.

After Construction is Complete

Apply for Final MFTE Certificate

The application procedure for requesting a final MFTE certificate is outlined in LMC 3.64.020 (J).


RCW 84.14.100(2) provides requirements for cities and counties to issue reports to the Department of Commerce on the certificates of tax exemptions issued during the previous year. These communities must follow reporting requirements to issue tax exemptions. Required reporting includes the following:  

  • The number of tax exemption certificates granted. 
  • The total number and type of units produced or to be produced. 
  • The number, size, and type of units produced or to be produced meeting affordable housing  requirements.  
  • The actual development cost of each unit produced. 
  • The total monthly rent or total sale amount of each unit produced. 
  • The annual household income and household size for each of the affordable units receiving a tax  exemption and a summary of these figures for the city or county. 
  • The value of the tax exemption for each project receiving a tax exemption and the total value of tax  exemptions granted. 

The City of Lakewood requires annual reporting for 12-year exemptions. Annual reports are due no later than February 1st of the following calendar year. Annual inspections will be conducted by City staff. 


Requirements under RCW 84.14.100(3)(a) specify that audits must occur at least once every five years.

Audits will be scheduled as follows for new exemptions:

  • For eight-year exemptions (where applicable), year five of the exemption.
  • For 12-year exemptions, years five and 10.

Please refer to the Washington State Department of Commerce Multifamily Property Tax Exemption Audit Program Guide for more information about MFTE program audits.

Lakewood MFTE Ordinance 792Development Services
Lakewood MFTE City ManualMFTE Administrator’s Manual
Conditional Lakewood MFTE ApplicationWSDOC MFTE Audit Guide