3.82.060 Tax exemption for multifamily housing in residential targeted areas.
A. Intent. Limited property tax exemptions from ad valorem property taxation for multiple-unit housing are intended to:
1. Encourage increased residential opportunities within the residential targeted area, as designated by the city council;
2. Stimulate new construction or rehabilitation of existing vacant and underutilized buildings for multiple-unit housing in the residential targeted area to increase and improve housing opportunities;
3. Assist in directing future population growth into the residential targeted area, thereby reducing development pressure on single-family residential neighborhoods; and
4. Achieve development densities which are more conducive to transit use in the residential targeted area.
B. Establishment and Duration of Exemption. The value of improvements qualifying under this chapter shall be exempt from ad valorem property taxation for either eight or 12 successive years, in accordance with RCW 84.14.020, beginning January 1st of the year immediately following the calendar year after issuance of the final certificate of tax exemption.
C. Limits on Exemption. The exemption does not apply to the value of the land or to the value of improvements not qualifying under this chapter, nor does the exemption apply to increases in assessed valuation of land or nonqualifying improvements. In the case of rehabilitation of existing buildings, the exemption does not include the value of improvements constructed prior to submission of the completed application required under this chapter.
D. Project Eligibility. A proposed project must meet the following requirements for consideration for a property tax exemption:
1. Location. The project must be located within the residential targeted area designated by the city council.
2. Tenant Displacement Prohibited. The project must not displace existing residential tenants of structures that are proposed for redevelopment. Existing dwelling units proposed for rehabilitation must have been unoccupied for a minimum of 12 months prior to submission of an application and must fail to comply with one or more requirements of the city’s building code, as now in effect or as amended. Applications for new construction cannot be submitted for vacant property upon which an occupied residential rental structure previously stood, unless a minimum of 12 months has elapsed from the time of most recent occupancy.
3. Size. The project must include at least 50 units of multiple-unit housing within a residential structure. A minimum of 50 new units must be constructed or at least 20 additional housing units must be added to existing occupied multiple-unit housing units. Existing multiple-unit housing units that have been vacant for 12 months or more do not have to provide additional units so long as the project provides at least 20 units of new, converted or rehabilitated multiple-unit housing units.
4. Permanent Residential Housing. The proposed multiple-unit housing units must be constructed to standards established for condominium construction or better and must be provided for permanent residential occupancy, as defined in LMC 3.82.030(E). Such housing shall be of high quality and finish materials appropriate to the design standards in the city center plan. Only that portion of the space designated for multiple-unit housing shall be eligible for the exemption provided for herein.
5. Proposed Completion Date. New construction and rehabilitation improvements must be completed within three years from the date of approval of the application, plus any extension of time granted under LMC 3.82.080(B).
6. Compliance with Guidelines and Standards. The project must be designed to comply with the applicable provisions of the comprehensive plan, development regulations, building, housing and zoning codes and any other applicable regulations in effect at the time the applicant submits a fully completed application to the director. New construction must comply with the city’s building code and all other applicable regulations for condominium construction. Rehabilitation and conversion improvements must comply with the city building code, and all other applicable regulations. For the duration of the exemption granted under this chapter, the property shall have no violations of applicable city codes and ordinances, including but not limited to zoning requirements, land use regulations and building and housing requirements for which a notice of violation has been issued and is not resolved by compliance, withdrawal or other final resolution. The project must also comply with any other standards and guidelines adopted by the city for the residential targeted area in which the project will be developed.
7. Leed. The project shall be designed to meet the LEED™ Silver Standard as established by the U.S. Green Building Council (USGBC).
8. Historic Structures. A project that results in the demolition of properties that are listed on the city of Lynnwood’s historic register is not eligible for the tax exemption. (Ord. 3112 § 1, 2015; Ord. 2961 § 2, 2012; Ord. 2681 § 6, 2007)