On February 11 Seattle voters will decide whether to create a new public development authority (PDA), this one charged with developing “social housing.” Whichever way they mark their ballots, “yes” or “no,” for the Seattle Social Housing Developer (SSHD), voters get to choose between two funding options. Shown on the ballot as Propositions 1A and 1B, in effect they’re just “yes” or “no” over again. To get that, it’s a good idea to understand what the advocates mean by social housing, though often as not they leave the plan a little fuzzy – to their advantage.
The stark difference is this: 1A creates a new payroll expense tax (PET) predicted to raise $50 million annually by taxing employers – not employees – 5 percent on any individual’s pay over $1 million per year. It’s the same structure as the existing JumpStart tax on employers. But this money goes entirely to the SSHD, a new, untested organization with only a few of 14 board members – and a new CEO from California – who have experience in developing publicly supported housing. This is what worries opponents: that the SSHD will crash and burn like the ill-fated Seattle monorail project 10 years ago.
A small slice of the $50 million raised by the new payroll tax goes to the city – Office of Housing, Finance Administrative Services – to set up and manage the tax collection system. Even if 1A passes next month, it will take the city, going through legally required steps, until sometime next year to get the program going.
In contrast to the annual $50 million created by 1A, Proposition 1B provides only $10 million annually for five years, the money to be taken from JumpStart revenues, spendable by the SSHD but with City Council control and the power to cut it off. The alternative was put on the ballot by a council majority that does not like the social housing plan. Favoring 1B were councilmembers Saka, Hollingsworth, Maritsa Rivera (the ordinance sponsor), Kettle and Council President Sara Nelson. Only Tammy Morales (before she resigned) opposed the plan. Council members Moore and Straus were absent.
Additionally, the council made sure that if voters choose 1B, the SSHD can’t to anything new at all. 1B money can only be spent for low-income housing, not the development of mixed income apartment communities which are, in the advocates view, the essence of social housing.
The campaign for social housing began in 2022. Creation of the Seattle Social Housing Developer (SSHD) through Initiative 135 was approved by voters in February 2023 with a 14-point margin. However, the law limiting ballot measures to just one subject meant advocates had to come back with a second initiative, I-137, to fund the SSHD. That’s now on the ballot as Proposition 1A.
House Our Neighbors (HON), the group campaigning for Proposition 1A, arose from among the community of advocates for low-income housing. The group is headed by co-executive directors Naishin Fu and Tiffani McCoy. McCoy was formerly with Real Change and managed the campaign for I-135. The success of that campaign two years ago created the first social housing developer in the U.S, according to the HON website.
There are some in the local political world who believe that lots of Seattle voters think social housing is low-income housing, something they’re used to voting for in large majorities. But social housing is not low-income housing, at least not primarily. “We need to recognize there’s a broader population,” says former 43rd District representative and long-time House Speaker Frank Chopp. He and others point out that people with incomes between 80 percent and 120 percent of Area Median Income (AMI) who can’t be helped through existing low-income housing programs are effectively priced out of the Seattle area rental market where rents typically exceed 30 percent of their incomes.
It’s those 80 to 120 percenters that social housing and Seattle’s SSHD is designed to serve. They’re “rent burdened” and over time will be forced to move farther and farther from the central city. Eighty percent of Seattle AMI for two people is $96,400, allowing for a rent of $2,712/mo. (Office of Housing/U.S. HUD). Per census data 120 percent of AMI is $146,577, allowing for rents of around $4,000). Chopp thinks providing for that lower middle-class group, workers at the lower end of the income pyramid, “workforce housing,” is the real and most important purpose of the movement for social housing.
Crucially, for advocates, social housing properties are government properties owned by the SSHD, permanent and not subject to the ups and downs (mostly ups) of the real estate market. Rents are stable. And that’s the point.
In a financial model of how the SSHD would work provided by board member Julie Howe, half the units in the 38-unit building would be rented to families making 80 percent of AMI or above and half below, with the lowest at 50 percent of AMI. Income from rents at 30 percent of renters’ income ranging from $1,500 to $3,900, is set to cover financing cost and building operations and maintenance. A couple of things come together to make social housing work: initial capital comes from the PET which can be provided at a level sufficient to reassure mortgage lenders, and the properties, government owned, are tax free, reducing operating costs. Also, compared to the private market, there are no investors pulling profits out. Those earnings stay with the building. Over time, the SSHD can issue revenue bonds against the net operating income from rents.
McCoy, of House Our Neighbors, said this to Cascade PBS describing advocates’ commitment to social housing: “Unless we implement housing as a human right, not a commodity, we’re going to continue seeing people unhoused and Black and brown people priced out of the city. I see this as one of the only ways we don’t just have cities for the wealthy with everyone else commuting in to serve them.” Such wide screen characterizations of the problem, and the work HON activists (many are well-known) have previously put in on low-income housing, are part of why it’s likely lots of people think social housing is for low-income residents and will vote “yes” for the SSHD, approving something they don’t fully understand.
For HON today, though, the big selling point for social housing is the idea that the buildings – existing properties SSHD buys or newly built apartment buildings – will all contain a range of incomes among their renters, creating desirable mixed-income communities. The top international example of this is Vienna where government ownership (just like Seattle Housing Authority (SHA)) and non-profit owners (structurally much like our non-profit housing providers) house about 50 percent of the city’s population with rents limited to about 30 percent of income. The difference is that SHA and our non-profits do only low-income housing. In Vienna the purpose is mixed income buildings. (A group from House Our Neighbors visited the Austrian city in 2024 as part of their planning for the 1A campaign.)
For opponents, the problem with the SSHD is its potential competition for limited low-income housing funds from city and state sources and low-income tax credits that go to investors based on the money they loan the development. None of these monies can be spent on housing for people earning more than 80 percent of AMI, so no problem, right? Not quite. SSHD projects which include apartments renting for 60 percent of AMI or less (and some will) could compete for funding from those sources to pay for the portion of the development serving low-income renters.
The whole SSHD plan misses the point: “House the homeless first,” says George Howland, a reporter retired from The Stranger, who’s doing communications for the opposition group of – you have to say older – well known affordable housing advocates. Opponents include John Fox, long-time head of the Seattle Displacement Coalition, Alice Woldt of Fix Democracy First (retired), Joe Martin, retired from Pike Place Market Clinic, Tim Harris, founder of “Real Change,” the street paper sold by the homeless, and Harriet Walden of Mothers for Police Accountability. They don’t hold out much hope for a favorable vote. “We’re completely outmatched,” Howland says.
That’s probably accurate. The House Our Neighbors campaign is endorsed by 14 labor unions, 48 community groups including the Low-Income Housing Institute, the largest local non-profit developer of low-income housing, and 19 community businesses. On January 21 the Housing Development Coalition which has 190 members voted to endorse 1A.
What could go wrong? Well, the city has a poor track record for creating new and separate public agencies. Critics of the SSHD plan point to the monorail project which came apart with nothing accomplished after spending $125 million (voter approved) taxpayer dollars. The first years of the King County Regional Homelessness Authority are similarly cited, usually by those still opposed.
While the 13-member SSHD board has a majority of members who have little or no experience in housing development, there are several with applicable experience including, notably, board member Julie Howe who’s been in low-income development for 25 years and teaches at the UW’s Runstad Department of Real Estate. The board has also recently hired a CEO, Roberto Jimenez, from California who has years of experience including time as CEO of Mutual Housing California, described as one of the most productive non-profit housing organizations in the state.
Board appointments are made by the mayor (Chuck Depew, treasurer), council (Howe and Alex Lew), MLK County Labor Council (Tori Nakamatsu-Figaora), Green New Deal Oversight Board (Mike Eliason) and the Seattle Renters Commission (Devyn Forschmiedt, Kaileah Baldwin, Katie LeBret, board secretary; Kay Zimmerman, Tom Barnard, board chair, and Wylie Duffy). Two members have recently resigned.
