It was after 11 p.m. when the Issaquah City Council made the decision to reward an affordable housing development with a 12-year property tax exemption at the Dec. 18 meeting.
The development agreement would allow the 355 residential units of the transit-oriented development project to be exempt from property taxes for 12 years through the state’s Multi-Family Tax Exemption program, which gives developers short-term property tax immunity in exchange for building affordable housing.
The transit-oriented development project, located just east of the Issaquah Transit Center at 1505 Newport Way NW, is a project between the city, Spectrum Development Solutions/the King County Housing Authority and CenturyLink to put a mixed-use development on the current CenturyLink truck parking and material storage site.
The project is set to be completed by 2021, and includes two buildings with a commercial ground floor and 355 residential units, 176 of which would be affordable.
City of Issaquah Economic Development Manager Jen Davis Hayes explained that the affordable units would “look the same as the other units” so that there would be no socio-economic class distinction in the buildings.
The 12-year property tax exemption would apply not just to the affordable units, but to all residential portions of the TOD in exchange for 15 percent of the project’s housing at 60 percent of the Annual Median Income in King County (meaning to qualify for the housing, a person would need to make 80 percent of the average annual income for one person in King County) and 5 percent of the units at 80 percent AMI.
For a one-person household, 60 percent AMI equals an income of $38,000 per year and 80 percent AMI amounts to a yearly salary of $50,600, according to information provided in the council’s agenda packet.
For a family of four, 60 percent AMI means an annual income of $54,200 and 80 percent AMI equals an annual income of $72,200.
The agenda bill was first presented to council at the Dec. 4 meeting, when a public hearing on the topic also occurred. It was sent back to the administration so that the language could be revised to specifically link the MFTE to the TOD project, and so that the ordinance could be rewritten to require an approved development agreement for a project to qualify for the MFTE program in the Tibbetts Valley TOD Residential Targeted Area.
Council members were concerned at the previous meeting in December that without these distinctions, the project could receive the exemption without meeting the city’s vision for affordable housing.
Facilitating transit-oriented development is part of the affordable housing segment of the city’s Issaquah Housing Strategy Work Plan, which was adopted in September.