The Seattle City Council voted unanimously Tuesday to approve a $2 million loan to the fledgling Seattle Social Housing Developer.
The bridge loan will help the public development authority pay for staffing and operations costs, and potentially purchase property, while it awaits the proceeds from a new business tax approved by voters in February. The Social Housing Developer will repay Seattle with revenue from the tax, which the city began collecting on Jan. 1, 2025 and the developer will start receiving in 2026.
The “excess compensation” tax levies a 5% tax on employer payroll expenses for each Seattle-based employee paid over $1 million in annual compensation. It is expected to generate about $50 million a year for the Seattle Social Housing Developer.
Mayor Bruce Harrell proposed the loan in June despite endorsing a competing Chamber of Commerce-backed measure that would have instead drawn from the existing Jumpstart payroll tax instead of establishing a new one. The Council voted 6-1 to place the competing measure on the ballot.
“While there were different strategies for how to fund the social housing developer, we share a vision for this model to be successful and add more housing options across our city,” said Harrell in a statement in June.
Seattleites strongly support the idea of social housing, which is publicly owned, mixed-income affordable housing that’s meant to serve middle- and low-income residents. Voters backed the creation of the Seattle Social Housing Developer 57% to 43% in 2023. The social housing tax measure passed 63% to 37% in February.
The Social Housing Developer has struggled through a rocky start, however. The entity has just one staff member so far, CEO Roberto Jiménez. The Seattle Times reported that two of the board of directors’ 13 members quit recently, accusing Jiménez of “abuse, anti-Black racism, and bigotry.”
Jiménez told the Times that discord is inevitable in a new organization, and chalked problems up to “growing pains.” The Social Housing Developer’s board of directors hired an outside investigator to look into the complaints.
