Why Wilburton Pencils: The Case We Made for Bellevue's MFTE Supercharger

Bellevue Chamber of Commerce  |  July 28, 2026

Bellevue's Multifamily Tax Exemption program came back to City Council at the start of the year with a set of staff-recommended updates, and one of them was already doing work before Council had adopted anything. On January 8, our PLUSH Committee wrote to Mayor Malakoutian and councilmembers backing the staff package, and we put the Wilburton MFTE supercharger at the center of the argument.

The market answered first

The clearest evidence for the supercharger was not a model, it was the response from developers.

This is a signal of how sensitive project feasibility is to policy, and of how powerful a well-calibrated incentive can be in helping projects pencil within an extremely challenging economic environment. 

The letter is direct about that environment: In most areas of Bellevue, multifamily residential projects remain financially non-viable under current market conditions, with interest rates, labor costs, and material costs elevated, and no clear indication they will meaningfully decline in the near term.

That sets the standard we asked Council to hold any future policy to.

"Any future policy changes associated with rezones must work on day one, and cannot be predicated on large rent increases simply to make pro formas viable." —PLUSH Committee letter to Bellevue City Council, January 8, 2026

By Bellevue's analysis, rent increases ranging from roughly 18 percent to as much as 75 percent would be required for projects to pencil, depending on construction type, an outcome the letter calls neither realistic nor desirable. The only reason as many multifamily units in Wilburton are being proposed at all, we argued, is that the mandatory affordability requirements there are paired with an MFTE offset.

Support, with a condition attached

The letter also restates a standing Chamber position.

"The Bellevue Chamber continues to oppose costly mandatory affordable housing mandates that effectively privatize the cost of affordable housing by placing it on renters in new construction." —PLUSH Committee letter to Bellevue City Council, January 8, 2026

What follows is a condition rather than a flat objection — if Council chooses to impose such mandates in future rezones, they must be paired with a Wilburton-style MFTE supercharger to at least modestly offset the added cost and preserve some degree of project feasibility.

We backed the parking reforms in the same package on related reasoning: Aligning parking requirements with the transit-oriented nature of multifamily development, especially near frequent transit service and light rail, is fiscally and environmentally responsible, and it reduces costs that otherwise make projects less viable.

Two process asks

The delay between adoption of the Wilburton zoning code and later consideration of MFTE changes for Wilburton created significant uncertainty in the market. Going forward, we asked the city to bring MFTE updates forward concurrently with future rezones, so incentives and requirements are aligned from the outset and developers have clarity when investment decisions are made.

We also urged support for the 12-year MFTE extensions authorized under state law. Seattle has deployed the option and recently adjusted it to encourage more participation, and it has been effective at keeping rent-restricted units in the market. It matters at the front end, as applicants are crunching numbers for the life of a project, and knowing whether the 12-year extension will be available changes the math at the outset.