Council Sizes Up a $1.5 Billion Transportation List and Moves the MFTE Catalyst Toward an Ordinance

Bellevue Chamber of Commerce  |  July 21, 2026

Bellevue's City Council spent much of its July 21 meeting on two questions we have been working for more than a year: how the city will pay for its transportation network as growth arrives, and how the Multifamily Tax Exemption can be tuned to produce more affordable housing in mixed-use areas. Neither item received a final vote. Both moved a step closer to one.

A $1.5 Billion List, and Not Enough to Build It

The Transportation Department briefed council on infrastructure that Bellevue will need to keep pace with its growth: new and improved sidewalks, bike lanes, streets, intersection upgrades and transit connections. By the city's own account, staff have identified roughly $1.5 billion worth of transportation projects, but under current funding practices these projects will not be completed when they are needed. Staff also introduced a simpler way of organizing those projects, allowing citizens and decision makers to have access to clear projects and their timelines. 

What a Transportation Benefit District Would Add

Addressing the funding dilemma, staff walked council through how a Transportation Benefit District could play a crucial role in providing the necessary funds. Through a 0.1 percent sales tax increase and a $20 vehicle registration fee, the city hopes to build projects that tie Bellevue's local network into the regional transportation and transit systems. This would, in turn, prepare the network for Bellevue's inevitable growth later down the line.

Where We Stand

Since May our position has not changed. We have held that there will be no new transportation revenue conversation, and that will continue to  hold true until the city releases a full sources and uses plan to the community. In April, the Bellevue Mobility Council filed a letter with a similar ultimatum, along with recommendations on how to proceed: match the funding tool to where the revenue is generated, so that property tax and vehicle license revenue funds neighborhood projects while sales tax revenue goes to the growth centers that produce it. 

Simply put, we request that project structure is clear and contains what we ask. Whether it is responsive will be the question of Policy Council in September, before the preliminary 2027-32 budget and capital project list reach council on September 15. 

The MFTE Catalyst Heads for Drafting

Council reviewed proposed updates to the Multifamily Tax Exemption program and directed staff to draft the adopting legislation and return at a future meeting. The package establishes both a four-year Supercharger catalyst aimed at increasing affordability in mixed use areas, and allows for eligible projects to take advantage of fee-in-liu payments. These payments provide developers alternative routes to participate in the program, along with tax exemption even when developing mandatory affordable units.

That second provision is the one we asked for by name. PLUSH's March 16 letter to council argued that mandatory affordability holds up only when it is paired with flexible tools, and it named the MFTE supercharger and fee in lieu options specifically. The proposal now heading into drafting makes that pairing.