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(1) Eight-Year Exemption Project Eligibility. A project must meet all of the following requirements for consideration for an eight-successive-year ad valorem property tax exemption on the value of the improvements qualifying under this chapter beginning January 1st of the year immediately following the calendar year after issuance of the final certificate of tax exemption:

(a) Location. The project must be located within one of the residential target areas as designated in CMC 3.80.030.

(b) Size. The project must be multifamily housing consisting of at least four dwelling units within a multistory residential structure or mixed-use development. For new construction, a minimum of four new units must be constructed. For projects converting or rehabilitating existing multifamily housing, at least four additional multifamily units must be added to existing occupied multifamily housing. Existing multifamily housing that has been vacant for 12 months or more does not have to provide additional units so long as the project provides at least four units of new, converted, or rehabilitated multifamily housing.

(c) Permanent Residential Occupancy Requirement. At least 50 percent of the space in new, converted, or rehabilitated multifamily housing must be for permanent residential occupancy.

(d) Town Center District Diversity of Multifamily Unit Types. In addition to the other requirements in this subsection, projects located in the town center (TC) district shall be located in a multistory, mixed-use structure, as described in CMC 18.31.080, and shall provide a mix of apartment types and sizes for a variety of household types according to the following standards:

(i) A minimum of 50 percent of the total units shall vary in size from other units by at least 250 square feet; or no more than 50 percent of the total planned units shall have the same number of bedrooms.

(ii) In multifamily developments with 18 units or more, no more than 60 percent of the units may be studios or one-bedroom units.

(e) The project shall be designed to meet the LEED Silver Standard at time of building permit submission as established by the U.S. Green Building Council (USGBC).

(f) Completion Deadline. New construction of multifamily housing and rehabilitation improvements must be scheduled to be completed within three years from the date of approval of the application, or within an extension of this time limit as authorized by the Director.

(g) Compliance With Guidelines and Standards. The project must comply with the City’s comprehensive plan, zoning, environment, and building codes and any other applicable regulations in effect at the time the application is approved.

(h) Vacancy Requirement. Existing dwelling units proposed for rehabilitation must have been unoccupied for a minimum of 12 months prior to submission of application and shall fail to comply with one or more requirements of the building code as set forth in CMC Title 15. 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 the most recent occupancy.

(2) Twelve-Year Exemption Project Eligibility. A proposed project must meet all of the following requirements for consideration for a 12-successive-year ad valorem property tax exemption on the value of the improvements qualifying under this chapter beginning January 1st of the year immediately following the calendar year after issuance of the final certificate of tax exemption:

(a) All requirements set forth in subsection (1) of this section; and

(b) The applicant must commit to designating at least 20 percent of the multifamily housing units as affordable housing units to low- and moderate-income households and the property must satisfy that commitment and any additional affordability and income eligibility conditions adopted by the City under this chapter. The total number of qualifying affordable housing units shall not exceed 30 percent of the total number of housing units within the same project. Provided, however, projects may contain up to 40 percent of the total number of housing units in the same project as affordable housing if the development includes supportive services on site, including but not limited to at least one of the following services: daycare, health care, employment counseling, business incubator space, or other supportive services for on-site residents. Projects including supportive services shall demonstrate they have consulted with a nonprofit or public agency to design a space suited to the proposed services. Projects intended exclusively for owner occupancy may meet this standard through housing affordable to moderate-income households.

(i) If calculations for the minimum 20 percent of the multifamily housing units required under this subsection (2) result in a fraction, then the minimum number of multifamily housing units for affordable housing shall be rounded up to the next whole number.

(ii) In projects granted 12-year exemptions, housing units identified for households with low, affordable, or moderate annual income shall continue to be made available to low, affordable, or moderate households for the length of the exemption period.

(c) The mix and configuration of housing units (e.g., studio, one-bedroom, two-bedroom) used to meet the requirement for affordable units under this subsection shall be substantially proportional to the mix and configuration of the total housing units in the project.

(d) When a project includes more than one building with multifamily housing units, all of the affordable housing units required in this subsection must not be located in the same building.

(e) The project shall be designed and constructed to meet the LEED Silver Standard at time of building permit submission as established by the U.S. Green Building Council (USGBC).

(3) Limits on Exemption. The exemption does not apply to the value of land or to the value of improvements not qualifying under this chapter, nor does the exemption apply to increases in assessed valuation of land and 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.

(4) Conclusion of Exemption. At the conclusion of the exemption period, any new housing costs shall be considered as new construction for the purposes of Chapter 84.55 RCW. (Ord. 08-21 § 6 (Exh. E); Ord. 13-12 § 1 (Exh. 1); Ord. 05-12 § 1 (Exh. 1))