Council Roundup: Further updates approved to tax incentive housing program

Published January 15 2026

Plus, councilmembers advance parking reforms to align with state law and preview the state legislative session

The City Council Tuesday approved updates to the city's Multifamily Tax Exemption program that will encourage new housing development in Bellevue, with a focus on the Wilburton area.

Bellevue's MFTE program significantly incentivizes new multifamily developments that include a certain amount of on-site affordable housing by providing a temporary property tax exemption. The updates approved Tuesday align the city's program with new land use codes in the Wilburton Transit-Oriented Development area and provide tax exemptions to a wider range of development types.

Updates included adopting a new 20-year homeownership program, allowing commercial buildings that convert to multifamily residential to qualify for the MFTE incentive, and adopting a new 8-year program in Wilburton.

The council directed staff to draft legislation for adoption of these updates at a future meeting. Additional details are available in the meeting agenda topic.

Parking reform initiated for new development

In response to recent updates in state law and to the city's Comprehensive Plan, the council initiated work on a parking reform land use code amendment aimed at modernizing Bellevue's parking regulations and aligning them with new policy and state mandates.

State legislation passed in 2024 and 2025 limits the city's ability to require minimum parking for certain land uses, including small residential and commercial developments, affordable and senior housing, childcare centers, mixed-use ground floors and residential conversions. It also sets specific requirements for parking stall dimensions and minimum parking ratios for multifamily and other development types.

The update is intended to bring Bellevue's land use code into compliance with recent state legislation and to reflect the policies included in the Bellevue 2044 Comprehensive Plan, including promoting transit-oriented development, lowering barriers to housing production and adopting more flexible, context-sensitive parking standards. Learn more about the project at Parking Reform Code Amendment.

The council directed staff to begin work on the code amendment and refer it to the Planning Commission for review and recommendation. The updates must be adopted by Jan. 27, 2027, to meet the state deadline. Public engagement will occur in multiple phases as the code amendment is developed, with opportunities for community input and feedback along the way. Additional information is available in the agenda materials.

State legislative session begins

Councilmembers also received a preview of the 2026 legislative session that began Jan. 12 in Olympia. Referred to as a short session, the 60-day session is meant to allow state legislators to make adjustments to the biennial budget they adopted last year and take into account any potential changes in revenue projections. They may also take up new programs as deemed necessary.

Topics of high interest that are expected to surface during the 2026 session include addressing the continued state budget shortfall, responding to federal government actions, and considering human services and housing affordability needs throughout the state.

The presentation to council also reiterated the key priorities in Bellevue's adopted 2026 State Legislative Agenda, including economic prosperity and partnership, affordable housing, transportation and streamlined permitting.

The full presentation is available on Bellevue Television replay.