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Development and Housing Incentives

Development and housing incentives are tools we can use to help us achieve our affordable housing goals and our sustainability goals. What incentives are available to developers depends on a number of factors. The information on this page includes incentives for Tacoma projects and provide a high-level overview of qualification criteria to help you understand if your project qualifies. 


Affordable Housing Incentives

To support our commitment to increasing our city's livability for all people, the City offers Affordable Housing Incentives to encourage the development of housing that meets all levels of income. 


Incentives that are currently available include:


Land Use Regulatory Code

Downtown Regional Center (adopted 1999, modified 2015)

  • Voluntary Inclusionary Housing (one of multiple bonus options for increasing FAR)
  • 50% of bonus units must be affordable
  • Affordable at no more than 50% Area Median Income(AMI) (rental) or 80% Area Median Income (ownership)
  • 50-year duration
  • Fee in-lieu option ($10,000 for every new unit added)
  • Example – A 5,000 sq. ft. site in the Downtown Mixed Use Zoning District would be allowed to have a 15,000 sq. ft. building outright with 3 Floor Area Ratio (FAR). The applicant has an average unit size of 750 sq. ft. The Floor Area Ratio is increased from 3 to 5, thereby allowing a building to be 25,000 sq. ft., an additional 10,000 sq. ft. This area can accommodate 12 more units at 750 sq. ft. size. Of these 13 additional added units, 6 would need to be 50% AMI (rental) for next 50 years. Alternatively, the applicant could have all 12 additional units market rate but would be required to pay $10,000 per added unit ($120,000 total).

Private Up Zones (adopted 2015)

  • Mandatory Inclusionary Housing
  • 25% of additional bonus units must be affordable
  • Affordable at no more than 50% Area Median Income (rental) or 70% Area Median Income (ownership)
  • 50-year duration
  • Fee in-lieu option ($5,000)
  • Example – A 6,000 sq. ft. site that only allows one dwelling is rezoned to a zoning district that allows a four-plex. One of the four units would need to be affordable at 50% AMI for 50 years.

Planned Residential Developments (adopted 2015)

  • Voluntary Inclusionary Housing (optional density bonus program)
  • 50% of bonus units must be affordable
  • Affordable at no more than 50% Area Median Income (rental) or 70% Area Median Income (ownership)
  • 50-year duration
  • Fee in-lieu option ($10,000)
  • Example – An R-2 site is allowed 8.7 dwelling units per acre outright. Through a Planned Residential Development, it is allowed 11 dwelling units  per acre. Through a Planned Residential Development that provides affordable housing, it is allowed 15 dwelling units per acre. Of the 4 additional dwelling units per acre allowed through affordable housing, 2 would need to be 50% Area Median Income for 50 years.

Mixed-Use Centers (adopted 2009, modified 2015 and 2018)

  • Voluntary Inclusionary Housing (one of multiple bonus options for increasing height)
  • 20% of units provided must be affordable (tied to Multi-Family Tax Exemption)
  • Affordable at no more than 70% Area Median Income(tied to Multi-Family Tax Exemption)
  • 12-year duration (tied to Multi-Family Tax Exemption
  • Fee in-lieu option ($10, 000)
  • Example – A 50-unit multi-family structure needs a height increase of 20 feet (2 stories) to allow for all 50 units. Due to the height increase, 10 units will have to be affordable at 70% Area Median Income. Without the height increase, only 30-units would be able to be permitted based on height limit.

Application Services

  • Affordable housing projects are assigned a dedicated project coordinator that works to trouble-shoot issues, keep review staff on track, and act as a point of contact
  • Affordable housing projects receive priority review for permitting from the City, often reducing permit review times from 25% to 50%. Further, affordable housing projects are eligible for expedited review through payment of an additional fee
  • Affordable housing projects receive a fee waiver for Type A pre-application meetings
  • For additional information, please visit the Affordable Housing Permit Program page.

Tax Incentives

  • Projects that provide affordable housing are Multi-family Tax Exemption Eligible.
    • Option A - A minimum of 20% of units, provided at 70% Area Median Income for 12 years, for a 12-year exemption
    • Option B - 25% of the units, provided at 70% Area Median Income forever for a 20-year exemption


For additional information regarding affordable housing incentives, please contact Dustin Lawrence, Development Specialist, at dlawrence1@cityoftacoma.org or (253) 321-1323.


Green Building Incentives

Building “green” is an approach that uses natural resources efficiently while creating quality buildings that improve human health, support a better environment and provide cost savings. This is achieved through using premium building materials, reducing energy and water use throughout a building’s life-cycle from siting to design, construction, operation, maintenance, renovation and deconstruction.


 For more information on building green within the City of Tacoma, contact Beth Jarot, Resilient and Green Building Specialist at bjarot@cityoftacoma.org or 253-208-4351.