Seattle Council Funds Voter-Approved Social Housing

- The funding originates from Proposition 1A, a measure passed by voters in February 2025 that created a new tax to support the social housing developer. This followed a separate 2023 ballot initiative, I-135, which established the public development authority but did not include a funding source. - Revenue is generated by a 5% tax paid by employers on the annual compensation of employees who earn more than $1 million. This "excess compensation" tax is projected to raise approximately $50 million per year. - The recipient of the funds is the Seattle Social Housing Developer (SSHD), a public authority created to develop, own, and maintain mixed-income housing that will remain permanently affordable. - The social housing model is designed to serve residents with a wide range of incomes, from 0% to 120% of the area's median income. Under this system, rent is capped at 30% of a tenant's income, and rent from higher-income residents helps to subsidize lower-income tenants. - The council's unanimous vote was the final legislative step needed to create the agreement for transferring the tax revenue to the SSHD. - The city began collecting the new tax for the 2025 tax year, with the first funds expected to be transferred to the developer in early 2026. - To bridge the gap until tax revenue arrives, the City Council approved a $2 million loan in July 2025 to support the developer's initial operating costs. - The Seattle Social Housing Developer plans to acquire its first property in early 2026, with the goal of opening its first building by the middle of the year.