(The Center Square) – Seattle Social Housing is set to receive its first-ever funding disbursement – $50 million – from a voter-approved excess compensation tax.
Seattle Social Housing is a public development authority focused on addressing housing needs through the social housing model, which removes housing from market speculation. The publicly owned and funded housing is available to people without income restrictions.
Rental rates at social housing units are capped at no more than 30% of a household’s income.
Although voters approved the creation of the authority in 2023, Seattle Social Housing did not have a dedicated revenue stream until voters later approved the 5% tax on businesses for annual employee compensation exceeding $1 million paid in Seattle.
In August, the Seattle Office of Economic and Revenue Forecast estimated the tax would generate $65.8 million in 2025, while cautioning that projections carry significant uncertainty due to data limitations.
With $50 million now expected, Seattle Social Housing plans to begin acquiring existing buildings for conversion into social housing units.
“This will be a milestone achievement for (Seattle Social Housing) as a public development authority,” Seattle Social Housing CEO Roberto Jimenez said in a newsletter. “Building off of the information obtained through the RFI, we will then begin securing acquisitions of existing buildings that will become social housing.”
Seattle already has a similar progressive tax in place through the Jumpstart Payroll Tax. The tax requires businesses with at least $7 million in annual payroll to pay rates ranging from 0.8% and 2.6% on salaries and wages paid to Seattle employees who make at least $150,000 per year. Revenues are dedicated to affordable housing and related programs.
Despite its voter-approval, the excess compensation tax was met with disapproval from business associations, including the Seattle Metropolitan Chamber of Commerce. The organization said social housing will not solve the city’s housing crisis, and called for a total regroup and reassessment of its organizational partnerships on the housing topic.
The Seattle City Council also showed an objection to the progressive tax and attempted to have an alternative ballot measure approved by voters. This measure would have allocated about $10 million per year from the city’s JumpStart Payroll Expense Tax and would expire after five years. That measure received 36% of votes compared to 63% for the excess compensation tax.
Voters’ overwhelming approval is what led Mayor-elect Katie Wilson to decide to run for Seattle mayor, as noted by The Center Square in a previous article.
