LYNNWOOD—In Lynnwood City Council’s very first meeting with newly appointed Council member Chelsea Wright, it discussed housing affordability funding, multi-family tax exemption updates, was briefed on the small business development program, and presented a recap on the Association of Washington Cities (AWC) visit to the state capital.
Fund 146 Housing Affordability Funding Plan
First on the agenda, Karl Almgren, Community Program Manager, led a presentation on Fund 146 – a special revenue fund approved by council in 2020 dedicated to supporting affordable housing initiatives in the city, following the state legislature passing SHB1406 in 2019 (which allowed for cities to participate in sales tax share).
Since then, Lynnwood has been collecting roughly $200,000 to $250,000 a year leading into 2026 with a fund balance of $1,060,870.
These funds can be used for acquiring, rehabilitating, or constructing affordable housing, operations and maintenance of new affordable or supportive housing facilities, or rental assistance for households whose income is at or below 60% Area Median Income (only available to cities with less than 100k population).
The funds cannot be used for emergency shelters or behavioral health facilities and care centers.
According to Almren’s report Monday, approximately one in four Lynnwood households receive support from DSHS, 20% are cost burdened (more than 30% of gross income goes toward housing), and 18% are severely cost burdened (more than 50% of gross income goes towards housing).
Other ways the city has supported housing affordability as of late has been adding a housing element to its Imagine Lynnwood 2025 Comprehensive Plan and passing a Housing Action Plan in 2022.
Since Monday’s meeting was a Business Meeting no action was taken, though the recommendations on the table for Council’s February 23 meeting is to authorize Mayor George Hurst to direct city staff to expend up to $600,000 from Fund 146, divided into Development/Capital Projects (for a $500,000 max), and rental assistance (up to $100,000).
Multi-Family Tax Exemption (MFTE) Updates
Next, Ben Wolters, City DBS Director, Algrem, and Kyle Ward, Human Services Coordinator updated council on its Multi-Family Tax Exemption (MFTE) program.
MFTE is a property tax waiver program which falls under RCW 84.14 – allowing local governments to give exemptions for new construction, conversion, and rehabilitation of multifamily residential improvements with at least four units. With these exemptions, the law states, property owners do not have to pay property taxes on the residential improvements for a given number of years.
The City of Lynnwood adopted the MFTE Program in 2007, with the mindset of encouraging housing and redevelopment of the City Center.
Currently, the Lynnwood MFTE program offers an 8- and 12-year program with an annual certificate review and reporting to the Washington State Department of Commerce. The 8-year program requires no affordable units, and the 12-year program requires at least 20% of the units must be affordable to low (less than or equal to 80% area median income (AMI) and moderate income (80–115% AMI) households. Most programs currently have a project enrollment deadline of December 31, 2031, and extensions are currently not offered.
The purpose of this agenda item was simply to update council on the status of the MFTE program.
Small Business Development Program Briefing
Following this update, Simreet Dhaliwal Gill, Business Development Program Manager for Lynnwood, briefed council on the status of Lynnwood’s Small Business Development Program Briefing – which was launched in February 2025.
In addition to just a general update (including the success and metrics of the program within its first year), the Department of Development and Business Services is looking to expand the program to launch new initiatives and projects soon.
In its first year, Gill’s report states, the program engaged with 12 unique industries (including retail, food, professional services, healthcare, construction, IT, and so on), held quarterly small business basics workshops, offered one-on-one consultations, expanded access to regional and technical financial assistance, conducted door-to-door outreach, held Lynnwood’s first Dining Month, and overall promoted Lynnwood as “small business-friendly” city.
As far as the metrics go, in 2025, 203 businesses have received direct business assistance through the program, 159 small businesses and entrepreneurs attended its quarterly small business workshops, 15 entrepreneurs received assistance through a partnership with Creative Workspace property, and a total of 12 outreach sessions were held in partnership with the Lynnwood PD (to discuss public safety and hear from small businesses owners on safety concerns).
In 2026, the Small Business Development Program plans to continue expanding the pilot-year initiatives while incorporating community feedback and following guidance from the 2015 Economic Development Action Plan. New efforts will include a monthly business newsletter outreach to office and property managers, and a Business Builder Expo in partnership with Economic Alliance Snohomish County. The City will also broaden access to service providers, including hosting the U.S. Small Business Administration for open office hours at City Hall.
Discussion 2026: Council Liaison
Lynnwood City Councilmembers serve as liaisons to various City boards and commissions and as the City’s representatives to outside agencies and organizations.
With newly elected City Council members this year, council then held a discussion on which positions each council member will serve on as a liaison.
Council member Bryce Owings will sit on the Arts Commission and the Planning Commission.
Council President Nick Coelho will sit on the Finance Committee and Disability Board.
Councilwoman Derica Escamilla will sit on the Finance Committee, the Youth Council and the Veterans Committee.
Council member Robert Leutwyler will sit on the Finance Committee, Human Services Commission, and Parks, Recreation and Cultural Arts.
Councilwoman Isabel Mata will sit on the DEI Commission.
Councilman David Parshall will sit on the Lynnwood Public Facilities District.
And lastly, an open position on the History and Heritage board remains to be filled. Council President Coelho appointed newly appointed Councilwoman Wright to fill the vacancy in the History and Heritage board.
Council will hold an election for an open 911 slot during its next Business Meeting.
Recap AWC City Action Days
Lastly, and before Monday’s meeting adjourned, council members had the opportunity to share their experiences at the AWC Conference in Olympia.
Council members divided into teams, attended various workshops, and had the ability to speak with law makers to vouch for legislation that would directly impact Lynnwood from January 21 through January 22. From those conversations, the Poplar Way Bridge project in Lynnwood was passed.
“I felt we made a pretty compelling case, to each of our representatives, at least as far as the business that I was apart of, of how the additional $5 million that we’re looking at would be pretty huge for our city, as far as capital projects go,” said Council President Coelho. “I think we were also clear that we needed to get a TIF exemption of some sort grandfathered in, so it doesn’t derail all of the plans we’ve made for City Center.”
Mayor Hurst shared discussions regarding a public safety sales tax which he called a “fluid approval.” So far Kent and King County are the only cities/county to approve the tax.
“It was a great session. We had one person who thought we should rescind it but by the end of it he changed his mind. Overall, I really appreciated the engagement of the council and ultimately it was time well spent,” said Mayor Hurst.
Councilwoman Escamilla echoed Hurst’s words regarding the public safety tax but added that her biggest takeaway was just showing support to state legislature – thanking them and being supportive of “what they have in the hopper that will affect Lynnwood directly.”
“It was a really great educational trip all around, for me, as well as our legislature,” said Escamilla.
Councilwoman Isabel Mata attended the Law and Justice Committee to hear, directly, the status of a bill that would prohibit law enforcement from wearing masks, as well as flock and data retention bills.
Author: Kienan Briscoe
