The SSHD can now afford to buy four or five El Capitans (Image: Joe Mabel/Wikipedia)
The push to create affordable “social housing” in Seattle will start with more cash than expected as revenue from a voter-approved tax on businesses with high earners to power the initiative came in well above forecasts, officials say.
Tuesday the Seattle City Council approved the legislative agreement opening the way for funding from the city’s voter-approved Excess Compensation Tax to be transferred to the Seattle Social Housing Developer as it begins its mission to acquire and build affordable housing in the city.
Officials announced the first payments from the February 2025 Prop 1A 5% tax on employers that pay any employee more than $1 million in compensation climbed above $100 million. The city began collecting the first Prop 1A payments from employers for the 2025 tax year this January. The tax had been expected to raise more than $50 million annually.
Instead, officials said this week the developer will begin with a $115 million start.
“Housing is far too expensive in this city. We need more housing of all types and all sizes, and social housing is part of the solution,” Mayor Katie Wilson said in the announcement. “With a robust revenue source, new leadership, and a mayor’s office committed to its success, the Seattle Social Housing Developer is now set up to fulfill its promise and deliver the mixed-income, permanently affordable, publicly-owned housing that Seattle voted for.”
The start of revenue operations for the city’s Seattle Social Housing Developer has come with a reorg. Last month, the newly formed development organization got a shakeup as affordable housing advocate Tiffani McCoy was named to lead the authority created to build or acquire 2,000 units of affordable housing over the next decade in Seattle. Seattle voters approved formation of the public developer and later the 5% tax.
Unlike other recent progressive revenue streams like city’s JumpStart tax that was formed to help preserve social services during the pandemic but has since been used to help patch over holes in general funding, Seattle’s Excess Compensation Tax has been architected to withstand that kind of erosion. By law, at least 95% of the tax revenue must be transferred directly to the SSHD.
“Although the 2025 tax revenue collection far exceeded expectations — initially estimated to be between $50 million and $62 million — it is a fraction of the money needed to address the housing crisis in Seattle,” the social housing advocacy group House our Neighbors said in a statement. “King County estimates that it needs more than 308,000 new homes over the next 20 years, at a cost of more than $3.96 billion per year beyond funding already available.”
McCoy said Tuesday the tax revenue will allow SSHD to “begin the process of acquiring our first building, and house hundreds of Seattleites this year alone,”
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