For many in the real estate and property management world, the mention of “MFTE” (Multifamily Tax Exemption) tends to inspire a familiar reaction: an exasperated eye roll or a deep sigh, as if you’ve just been asked to solve a riddle wrapped in a puzzle. And honestly, we get it. With its complex requirements depending on the city, its mountain of paperwork, and the ongoing compliance checks, it’s easy to see why the program has earned a reputation for being, well, complicated.

But here’s the thing: once you’ve cracked the code, MFTE offers incredible benefits for property owners and renters alike—think tax breaks for owners and affordable rents for residents. It just takes a little patience (and a knowledgeable property management partner) to get through the fine print. Bringing a multifamily housing project to completion in today’s challenging market is no easy task.

PROGRAM BENEFITS

Construction costs continue to rise, and competition is ever present. The dance between profitability and financial ruin weighs heavy on even the most seasoned investor. The Multifamily Tax Exemption (MFTE) can be a deal maker when it comes to the viability of a multifamily project.

Edison47 is proud to have communities participating in the MFTE program in 4 cities including Seattle, Redmond, Port Orchard, and Tacoma.

We take pride in being trailblazers for the MFTE program in Port Orchard. We didn’t just participate —we were asked to provide our expertise to city officials to write what would later become the official guidelines for the city as a whole.

Edison47 has utilized the MFTE programs across multiple projects. Most municipalities offer either an 8, 10 or 12 year program. On the lower end of the term, developers are able to leverage a tax abatement without impacting market rents; as the term increases rent offsets tied to AMI (Area Median Income) come into play. With these programs, you are required to limit income to a given percentage, required to certify the income, employment and household composition while ensuring the applicants continue to meet the given properties rental criteria, easy right?

Edison47 has benefited from years of program implementation, oversight and development with multiple agencies.

SHOW ME THE NUMBERS

Though the setup, auditing and compliance of establishing such a program is substantial, the cost of not implementing a program can be staggering. At one Edison47 community (Proctor Station) the eight-year tax exemption was set to expire; this was going to increase property tax expenses $480,000. Edison47 and the team from Rush Capital worked with the City of Tacoma to structure a new program allowing for the conversion of 31 apartment homes (20% of the community) into affordable MFTE compliant units upon unit vacancy; netting a savings of $2.1M over 12 years or approximately $175,000 annually resulting in a $1.5M increase in the asset’s value!

Our commitment to the MFTE program reflects our broader mission: creating housing solutions that blend affordability with quality, while contributing to the growth and diversity of each community we serve.

For more information on implementing MFTE in your community, feel free to reach out for consulting at opportunity@edison47.com