This chapter establishes regulations pertaining to the multi-family tax exemption program authorized by Chapter 84.14 RCW. [Ord. 844 § 2, 2024; Ord. 413 § 1, 2004]

This chapter provides limited exemptions from ad valorem taxation as permitted by Chapter 84.14 RCW:

1. Encourage increased residential opportunities, including affordable housing, within urban centers designated by the City Council as residential target areas;

2. Stimulate new construction or rehabilitation of existing vacant and underutilized buildings for multi-family housing in residential target areas to increase and improve housing opportunities;

3. Assist in directing future population growth to designated urban centers consistent with the vision of the Comprehensive Plan; and

4. Achieve development densities more conducive to transit use in designated urban centers. [Ord. 844 § 3, 2024; Ord. 479 § 1, 2007, Ord. 413 § 1, 2004]

The following definitions apply to this chapter:

1. “Affordable housing” means residential housing rented by a person or household whose monthly housing costs, including utilities other than telephone, do not exceed thirty percent of the household’s monthly income. For owner occupancy housing, “affordable housing” means residential housing within the means of low or moderate-income households.

2. “Contract” means the agreement between the owner or, for permanently affordable homeownership, a qualified non-profit organization and Burien that contains the terms and conditions, including for each MFTE unit as designated according to the Final Certificate, for the duration of the compliance period as a property tax exemption eligibility condition according to this Chapter.

3. “Director” means the director of the Community Development Department or any successor office, department, or agency responsible for its functions concerning this chapter or their authorized designee.

4. “Household” means a single person, family, or unrelated persons living together.

5. “Low-income household” means a single person, family, or unrelated persons living together whose adjusted income is at or below eighty percent (80%) of the median family income adjusted for family size in King County, as reported by the United States Department of Housing and Urban Development.

6. “Moderate-income household” means a single person, family, or unrelated persons living together whose adjusted income is more than eighty percent (80%) but is at or below one hundred fifteen percent (115%) of the median family income adjusted for family size, for the county where the project is located, as reported by the United States Department of Housing and Urban Development.

7. “Multi-family housing” means building(s) having four or more dwelling units not designed or used as transient accommodations and not including hotels and motels. Multi-family units may result from new construction, rehabilitation, or conversion of vacant, underutilized, or substandard buildings to multi-family housing.

8. “Owner” means the property owner of record.

9. “Permanent residential occupancy” means multi-family housing that provides either owner occupancy or rental accommodation that is leased for at least one month.

10. “Qualified non-profit organization” means a non-profit organization or any subsidiary or affiliate of such organization.

11. “Rehabilitation improvements” means modifications to existing structures that are vacant for 12 months or longer or modification to existing occupied structures that convert nonresidential space to residential space and/or increase the number of multi-family housing units.

12. “Residential target area” means an area designated by the City Council as lacking sufficient, available, desirable, and convenient residential housing to meet the needs of the public. It includes parcels in the Urban Center and all commercial and multifamily districts where BMC Title 19 allows multifamily dwellings.

13. “Urban center” means a center designated in the land use element of Burien’s comprehensive plan. It is a compact identifiable district containing several business establishments, adequate public facilities, and a mixture of uses and activities, where residents may obtain various products and services under RCW 84.14.010(17). [Ord. 844 § 4, 2024; Ord. 479 § 1, 2007, Ord. 413 § 1, 2004]

1. Criteria. Following a public hearing, the City Council may, in its sole discretion, designate one or more residential target areas. Each designated target area must meet the following criteria, as determined by the City Council:

A. All parcels in the Urban Center, Ambaum Boulevard Park Community Plan area, and all commercial and multifamily zoning districts implementing Commercial Mixed Use and Residential Medium future land use designations under BMC Title 19, now or as hereafter amended, are designated as a single residential target area under this chapter;

B. The target area lacks sufficient available, affordable, desirable, and convenient residential housing to meet the needs of those likely to live in the residential target area if appropriate housing was available consistent with the Comprehensive Plan Housing Element; and

C. The provision of additional housing opportunities, including affordable housing, in the target area will stimulate construction of new multi-family housing and rehabilitation of existing vacant and underutilized buildings.

D. In designating a residential target area, the City Council may consider other factors, including, but not limited to:

i. whether additional housing in the target area will attract and maintain a significant increase in the number of permanent residents;

ii. whether providing additional housing opportunities for low- and moderate-income households would meet the needs of citizens likely to live in the area if affordable housing were available;

iii. whether an increased residential population in the target area will help to achieve the Growth Management Act planning goals mandated under RCW 36.70A.020; or

iv. whether encouraging additional housing in the residential targeted area supports significant public investment in public transit or a better jobs and housing balance.

E. The City Council may, by ordinance, amend or rescind a residential target area designation using the procedures outlined in this chapter.

2. Target Area Standards and Guidelines. For each designated residential target area, the City Council must adopt and implement basic requirements for new construction and rehabilitation, including the application process and procedures. The City Council may also adopt

A. Requirements for demolition of existing structures and site utilization; and

B. Building requirements for parking, height, density, environmental impact, public benefit features, compatibility with the surrounding property, and other amenities to attract and keep permanent residents and properly enhance the livability of the residential target area. The required amenities shall be relative to the size of the proposed project and the tax benefit to be obtained.

3. Designated Target Area. The proposed boundaries of the “residential target area” boundaries of:

A. the Downtown Urban Center future land use designation as indicated on the official city future land use map and associated implementing zones in BMC Title 19.

B. the Ambaum Boulevard Corridor and Boulevard Park Community Plan area as adopted in the Ambaum Boulevard Corridor and Boulevard Park Community Plan and associated implementing zones in BMC Title 19.

C. all mixed-use and multifamily zones in BMC Title 19 implementing the Commercial/Mixed Use and Residential Medium future land use map designations. [Ord. 844 § 5, 2024; Ord. 479 § 1, 2007, Ord. 413 § 1, 2004]

1. Duration of Exemption. The value of improvements qualifying under this chapter will be exempt from ad valorem property taxation as follows:

A. For properties for which applications for certificates of tax exemption eligibility are submitted under this chapter before November 18, 2024, the value is exempt:

i. For eight successive years beginning January 1st of the year immediately following the calendar year of issuance of the final certificate of tax exemption; or

ii. For twelve successive years beginning January 1st of the year immediately following the calendar year of issuance of the final certificate of tax exemption, if the property otherwise qualifies for the exemption under this chapter and meets the conditions in this subsection. For the property to qualify for the twelve-year exemption under this subsection, the applicant must commit to renting or selling at least twenty percent (20%) of the multi-family housing units as affordable housing units to low and moderate-income households. In the case of projects intended exclusively for owner occupancy, the minimum requirement of this subsection may be satisfied solely through housing affordable to moderate-income households.

B. For properties for which applications for certificates of tax exemption eligibility are submitted under this chapter after November 18, 2024, the value is exempt:

i. For eight successive years beginning January 1st of the year immediately following the calendar year of issuance of the final certificate of tax exemption for rental or owner-occupied units.

ii. For twelve successive years beginning January 1st of the year immediately following the calendar year of issuance of the final certificate of tax exemption for rental units. For a property to qualify for the twelve-year exemption under this subsection, the property owner must commit to renting at least twenty percent (20%) of the units as affordable to households making up to eighty percent (80%) of the median family income for King County, as reported by the United States Department of Housing and Urban Development;

iii. For twelve successive years beginning January 1st of the year immediately following the calendar year of issuance of the final certificate of tax exemption for owner-occupied units. For a property to qualify for the twelve-year exemption under this subsection, the initial property owner must commit to selling at least twenty percent (20%) of the units as affordable to households making up to one hundred fifteen percent (115%) of the median family income for King County, as reported by the United States Department of Housing and Urban Development. The property owner must also commit to placing a resale restriction on the title for the designated affordable units to ensure that any of these units sold before the exemption expiration are sold as affordable to households making up to one hundred fifteen percent (115%) of the median family income for King County.

iv. For twenty successive years beginning January 1st of the year immediately following the calendar year of issuance of the final certificate of tax exemption for owner-occupied units. For the property to qualify for the twenty-year exemption under this subsection, at least twenty-five percent (25%) of the units must be built by or sold to a qualified nonprofit or local government partner that will assure permanent affordable homeownership for eligible households and support the residents of these units. The remaining seventy-five percent (75%) of units may be rented or sold at market rates.

2. Provision of Affordable Units. For any affordable units required in this section for which applications for certificates of tax exemption eligibility are submitted under this chapter after November 18, 2024, the following shall apply:

A. The mix and configuration of affordable units (e.g., studio, one-bedroom, etc.) shall be substantially proportional to the mix and configuration of the total housing units in the project unless approved by the City Council or a City Council authorized administrative official or commission.

B. Affordable housing units shall be intermingled with all other units in the development.

C. The quality of construction and finish materials in those affordable units used to qualify for the exemption shall be the same as other housing units in the project.

3. Relocation Expenses. Upon the expiration of a 12-year exemption or exemption extension for a rental property issued after July 25, 2021, the property must provide relocation expenses for tenants who experience rent increases after the exemption expiration.

A. At the end of the tenth and eleventh years of a twelve-year exemption or extension for a rental property authorized in this chapter, the applicant or the property owner at that time must provide eligible tenants of affordable units with notification of the applicant’s or property owner’s intent to provide the tenant with relocation assistance in an amount equal to one (1) month.

B. For any twelve-year exemption or extension of an exemption for a rental property authorized under this chapter, at the expiration of the exemption, the applicant must provide tenant relocation assistance equal to one (1) month’s rent to a qualified tenant within the final month of the qualified tenant’s lease.

C. To be eligible for tenant relocation assistance under this subsection, the tenant must occupy an income-restricted unit when the exemption expires and qualify under this chapter’s affordability requirements when seeking relocation assistance.

D. If affordability requirements consistent with those required under this chapter remain in place after the exemption expiration, relocation assistance will only be required within the final month of the lease of a qualified tenant occupying the unit before the exemption expiration. The tenant must qualify under this chapter’s affordability requirements when seeking relocation assistance.

4. Limits on Exemptions. The exemptions do not apply to the value of land or non-housing related improvements not qualifying under this chapter, or to increases in assessed valuation of land and non-qualifying improvements. In rehabilitating existing buildings, the exemptions do not include the value of improvements constructed before submission of the completed application required under this chapter.

5. Project Eligibility. A proposed project must meet the following requirements for consideration for a property tax exemption:

A. Location. The project must be located within a residential target area designated in BMC 19.45.020.

B. Tenant Displacement Prohibited. The project must not displace existing residential tenants of proposed redevelopment structures. Existing dwelling units proposed for rehabilitation must have been unoccupied for a minimum of 12 months before submission of the application and must have one or more violations of Burien’s minimum housing code. 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 end of most recent occupancy.

C. Size. The project must include at least four multi-family housing units within a residential structure or as part of a mixed-use development. A minimum of four new units must be constructed, or at least four additional multi-family units must be added to existing occupied multi-family housing. Existing multi-family housing vacant for 12 months or more does not have to provide additional units if the project provides at least four units of new, converted, or rehabilitated multi-family housing.

D. Permanent Residential Housing. At least 50 percent of the space designated for multi-family housing must be provided for permanent residential occupancy, as defined in BMC 19.45.010.

E. Proposed Completion Date. New construction multi-family housing and rehabilitation improvements must be scheduled to be completed within three years from the application approval date.

F. Compliance With Guidelines and Standards. The project must be designed to comply with the City’s comprehensive plan, building, housing, zoning codes, and any other applicable regulations in effect at the time the application is approved. New construction, rehabilitation, and conversion improvements must comply with BMC Title 15. The project must also comply with any other City Council standards and guidelines for the residential target area where the project will be developed.

G. Minimum Residential Density. The project shall achieve a minimum residential density of 50 dwelling units per net acre. For this chapter, residential density shall be calculated using the following method.

H. Public Amenities. The project must provide public amenities to qualify for the exemption. The Director shall determine whether proposed public amenities fulfill the exemption requirements, and may include providing at least one of the following:

i. Ground-floor commercial space in a mixed-use project as defined by BMC 19.10.350.

ii. At least one complete public benefit feature from BMC Table 19.15.025.1 within the Urban Center. This amenity may also be used to qualify for additional height and density under that section. Outside the Urban Center, proposed public benefits shall include affordable housing and/or commercial or cultural space, enhanced public sidewalks, outdoor or indoor open space, or focal point amenities consistent with approved subarea plans and applicable zoning standards.

iii. Housing designed, marketed, and managed for persons 55 and older.

iv. Income-restricted housing based on the length of the exemption. For the twelve- and twenty-year exemptions, the property must meet the minimum exemption requirements under this chapter.

v. The cost of providing these amenities must be relative to the size of the project and the tax benefit sought.

6. Application Procedure. A property owner who wishes to propose a project for a tax exemption must:

A. File with the Burien Community Development Department the required application and the required fees established by resolution. If Burien denies approval of the application, Burien will retain that portion of the fee attributable to its administrative costs and refund the balance to the applicant.

B. The required application shall include:

i. A completed City of Burien application including any grounds for the exemption;

ii. Preliminary floor and site plans of the proposed project;

iii. A statement acknowledging the potential tax liability when the project ceases to be eligible under this chapter; and

iv. Verification by oath or affirmation of the information submitted.

v. For rehabilitation projects, the applicant shall also submit an affidavit that existing dwelling units have been unoccupied for at least 12 months before the application filing and shall secure from Burien verification of property noncompliance with Burien’s minimum housing code.

7. Application Review and Issuance of Conditional Certificate. The Director may certify as eligible an application that complies with each requirement of this chapter. The Director shall render the decision to approve or deny an application within 90 days of receipt of a complete application.

A. Approval. If an application is approved, the applicant shall enter into a contract with the City, subject to approval by resolution of the City Council regarding the terms and conditions of the project. Upon Council approval of the contract, the Director shall issue a Conditional Certificate of Acceptance of Tax Exemption. The Conditional Certificate expires three years from the approval date unless an extension is granted, as provided in this chapter.

B. Denial. The Director shall state in writing the reasons for the denial and send notice to the applicant at the applicant’s last known address.

C. Appeal. An applicant may appeal a denial to the City Council within 14 calendar days of issuing the notice of denial. On appeal, the Director’s decision will be upheld unless the applicant can show no substantial evidence on the record to support the Director’s decision. The City Council’s decision on appeal will be final.

8. Extension of Conditional Certificate. The Director may extend the Conditional Certificate for a period not to exceed 24 consecutive months. The applicant must submit a written request stating the grounds for the extension, accompanied by a processing fee established by resolution. The Director may grant an extension if the Director determines that:

A. The anticipated failure to complete construction or rehabilitation within the required period is due to circumstances beyond the owner’s control;

B. The owner has been acting and could reasonably be expected to continue to act in good faith and with due diligence; and

C. All the conditions of the original contract between the applicant and the City will be satisfied upon completion of the project.

9. Application for Final Certificate. Upon completion of the improvements agreed upon in the contract between the applicant and the City and upon issuance of a certificate of occupancy, the applicant may request a Final Certificate of Tax Exemption. The applicant must file with the Burien Community Development Department the following:

A. A statement of expenditures made concerning each multi-family housing unit and the total expenditures made concerning the entire property;

B. A description of the completed work and a statement of qualification for the exemption;

C. A statement that the work was completed within the required three-year period or any authorized extension. Within 30 days of receipt of all materials required for a Final Certificate, the Director shall determine which specific improvements satisfy the requirements of this chapter; and

D. Required fees as established by Council through resolution. If the application for the Final Certificate is denied, Burien will retain that portion of the fee attributable to its administrative costs and refund the balance to the applicant.

10. Issuance of Final Certificate. If the Director determines that the project has been completed consistent with the contract between the applicant and Burien, including being timely, Burien shall, within 14 days, file a Final Certificate of Tax Exemption with the King County Assessor.

A. Denial. The Director shall notify the applicant in writing that a Final Certificate will not be filed if the Director determines that:

i. The improvements were not completed timely;

ii. The improvements do not comply with the contract between the applicant and Burien; or

iii. The owner’s property is otherwise not qualified under this chapter.

B. Appeal. Within 14 calendar days of the Director’s denial of a Final Certificate, the applicant may appeal to Burien’s Hearing Examiner, as provided in Chapter 2.20 BMC. The applicant may appeal the Hearing Examiner’s decision in King County Superior Court under RCW Title 36.70C, the Land Use Petition Act.

11. Extension of Tax Exemption. The rental property owner that received an eight-year or twelve-year tax exemption under this chapter may apply for an extension for an additional twelve successive years.

A. No extension for a property with a twenty-year tax exemption will be granted.

B. Only one (1) extension may be granted.

C. For the property to qualify for an extension:

i. The property must have qualified for, satisfied the conditions of, and utilized the eight- or twelve-year exemption sought to be extended;

ii. The owner must timely apply for the extension on Burien forms within eighteen (18) months of the original exemption’s expiration; and

iii. The property must meet this chapter’s requirements for the property to qualify for a twelve-year exemption, as applicable at the time of the extension application.

iv. The applicant has provided the application fee based on the expected review time.

D. This extension is subject to the requirements for tenant relocation assistance provided in section (3) upon the expiration of the extension.

12. Cancellation of Tax Exemption. If the Director determines the owner is not complying with the contract terms, the tax exemption will be canceled. This cancellation may occur after the annual review or any time after the Director determines noncompliance. If the owner converts the multi-family housing to another use, the owner must notify the Director and the King County Assessor within 60 calendar days of the change in use.

A. Effect of Cancellation. If a tax exemption is canceled due to a change in use or other noncompliance, the King County Assessor may impose an additional tax on the property, together with interest and penalty, and a priority lien may be placed on the land, under state legislative provisions.

B. Notice and Appeal. Upon determining that a tax exemption is to be canceled, the Director shall notify the property owner and any qualified non-profit organization managing affordable units in the project by certified mail. The property owner may appeal the determination by filing a notice of appeal with the City Clerk within 30 calendar days, specifying the factual and legal basis for the appeal. The Hearing Examiner will conduct a hearing where all affected parties may be heard and all competent evidence received. The Hearing Examiner will affirm, modify, or repeal the decision to cancel the exemption based on the evidence received. An aggrieved party may appeal the Hearing Examiner’s decision to the King County Superior Court under RCW Chapter 36.70C, LUPA. [Ord. 844 § 6, 2024; Ord. 479 § 1, 2007, Ord. 413 § 1, 2004]

1. Annual Compliance Review. Within 30 calendar days after the first anniversary of the date of filing the Final Certificate of Tax Exemption, and each year after that, for the applicable exemption period, the property owner shall file a notarized declaration with the Director indicating the following:

A. A statement of occupancy and vacancy of the multi-family units during the previous year;

B. A certification that the property continues to comply with the contract with Burien; and

C. A description of any subsequent improvements or changes to the property.

Burien staff may also conduct on-site verification of the declaration. Failure to timely submit the annual declaration will cancel the tax exemption, consistent with BMC 19.35.030(12).

2. Auditing. At least once every five (5) years of an exemption, the property owner shall participate in an audit of the exemption conditions to ensure that units are offered at the rents specified in the contract required for the Conditional Certificate. This audit will comply with the requirements of RCW 84.14.100(3).

A. Audits must review all available records the property owner retains regarding compliance with the contract terms.

B. Burien staff or their designees shall conduct an on-site verification of the following information available since the last audit was conducted, including:

i. Occupancy for all residential units included under the exemption.

ii. Rents of occupied rental units designated as income-restricted according to the contract.

iii. Sale prices of owner-occupied units designated as income-restricted according to the contract.

iv. Records of yearly certification of household income for all tenants of income-restricted rental units, including self-reported information by tenants and documentation that this information has been verified.

v. Records of certification of household income at the time of the property’s last sale if the property has been sold since the most recent audit.

C. The results of the audit received by Burien for rental properties will include a summary of building occupancy, rents charged for income-restricted units under leases, sale prices for owner-occupied income-restricted units, household size, total household income, and whether the verification of household income was satisfactory. No personally identifiable information about occupants will be retained by Burien staff or their designees for these records.

D. Burien will review the audit results to determine compliance with the contract’s provisions, including whether the rents charged during the period audited were compliant with affordability requirements and whether the tenants of income-restricted units were properly certified for occupying these units. This information will also be forwarded to the Department of Commerce.

E. If a property subject to an MFTE is deemed out of compliance with the contract’s requirements, the Director shall notify the property owner by certified mail describing the audit results and all contract conditions not fulfilled since the previous audit. At the discretion of the Director, the city may levy additional conditions or penalties, including:

i. Requirements for an additional audit to be conducted at a specified future date to confirm that corrective action has been taken to come into compliance.

ii. For rental projects with rents not compliant with affordability requirements, penalties are calculated for each affordable unit with non-compliant rents up to the difference between the rents charged under the actual leases and the required rents to qualify under the contract. This is subject to notification from the Department of Commerce under RCW 84.14.100(3) regarding noncompliant projects.

iii. Cancellation of the exemption under BMC 19.45.030(12), including the levy of additional penalties until the property was last deemed to comply.

iv. Ineligibility for future extensions of the tax exemption under BMC 19.45.030(11).

F. Failure to comply with an audit or to maintain all required records will be deemed as evidence of non-compliance with the contract requirements and result in the exemption’s cancellation.

G. Units managed by qualified non-profit organizations are not subject to audit under this section. [Ord. 844 § 7, 2024]

The City Council shall review the effectiveness of this Chapter in meeting the stated purposes in BMC 19.45.005 not more than five (5) years after the last review of the chapter conducted by the city. [Ord. 844 § 8, 2024; Ord. 413 § 1, 2004]