The city of Poulsbo will not proceed with the Multifamily Tax Exemption program after the planning commission recommended against it after finding out it would result in a tax shift not just to Poulsbo taxpayers but to all Kitsap County residents.
Planning and Economic director Heather Wright discussed the issue at last week’s City Council meeting.
The MFTE program was founded in 1995 and has been adopted by over 20 communities in the state. According to a 2019 Department of Commerce report, the program has produced 1,210 affordable units. It authorizes 8-, 12- and 20-year property tax exemptions to encourage multifamily housing and requires a percentage of affordable housing in the 12- and 20-year programs, city documents say.
The planning commission was asked to evaluate the program as stated in the Housing Action Plan and Commercial Land Market Analysis. MFTE was identified as a tool that could be used to encourage affordable housing in targeted areas. The commission began its evaluation of the program in February after a briefing from the Planning & Economic Development committee.
The commission met three times on the topic, and three members met with the Kitsap County tax assessor in April to get answers to questions raised throughout the process, documents say.
Commission members said they were not impressed with the results, that it was not the right tool for Poulsbo and that more cost-effective tools may work better. There was also concern over the amount of staff time and resources necessary to administer the program, and that the tax shift could become “overly financially burdensome,” depending on the participation in the program, per documents.
“If we were to participate in this program, Poulsbo taxpayers would have to absorb and pay for the exemption of those buildings for the duration of time that they were included in the program,” Wright said, adding the city could consider the program again in the future.
Also during the meeting, the council approved two new city positions — public works director and assistant city administrator. Both positions will be filled internally.
Mayor Becky Erickson has been advocating to bring back the public works director position eliminated in 2014. The new position will oversee engineering and public works to maintain collaboration between the two departments necessary for a growing city, documents read. The engineering director position will be eliminated. The focus of the new position will be on resources and strategies for long-term utility planning.
“Now, there’s such an interplay and complexity to so many of the things that go on in public works…that there needs to be better integration with the engineering team,” Erickson said. “It’s not just simply sweeping the roads and cutting the grass.”
The assistant city administrator will acknowledge the increased responsibilities being performed and which are necessary to support and assist the mayor, who acts in the capacity of city administrator, per documents. Finance director Deb Booher currently assists Erickson with policy creation and interpretation. Booher will fill the new position.
“She has been our finance director, but she’s been a lot more than that,” Erickson said. “She’s being promoted.”