The long-running fight over social housing in Seattle just crossed a major threshold. On Tuesday, the Seattle City Council voted unanimously to start transferring revenue from the voter-approved social housing tax to the Seattle Social Housing Developer, clearing the way for the new public agency to actually begin buying and running permanently affordable, mixed-income buildings. Years of organizing and two separate ballot measures are now shifting from campaign mode into an operational phase, where tax dollars can be used to acquire and preserve homes across a range of incomes.
The vote finalizes an ordinance that sets up an interlocal agreement spelling out how the tax money will be collected, reimbursed, and passed along to the developer. The measure appears as Council Bill 121153 on the city agenda and moved through the Finance, Native Communities and Tribal Governments Committee in January before returning to the full council this week, as shown in the city's agenda. As reported by KING 5, the final vote was unanimous.
What the tax is
The new funding stream comes from Proposition 1A, a 5% "excess compensation" tax on the portion of an employee’s pay above $1 million that is paid in Seattle. It is an employer-paid tax that took effect January 1, 2025. According to the City of Seattle, businesses will file returns for the 2025 calendar year by January 31, 2026, with collections shifting to a quarterly schedule after that. The ordinance the council just approved spells out that the City will first recoup implementation costs and any short-term loans before sending net proceeds on to the social housing developer.
How much and when
Supporters estimate the levy will bring in roughly $50 million a year, and both city staff and the developer say the first chunk of money is right around the corner. The Seattle Social Housing Developer's Request for Information notes that the agency expected an early revenue transfer in late February and has already been soliciting potential properties. Committee briefings indicated that the first transfers were planned for early March. The developer's pipeline materials and the council committee packet spell out the sequence, including how the initial funds will be used to reimburse loans and administrative costs before net project funding is released, according to the Seattle Social Housing Developer and committee materials posted online.
Leadership and readiness
All of this is landing as the public developer works through its own internal shakeup. In mid-January, the board removed its CEO and appointed campaign leader Tiffani McCoy as interim executive, a change detailed by local reporters. Coverage from Capitol Hill Seattle reports that McCoy plans to quickly hire senior development staff to move acquisition and predevelopment work forward. The developer's RFI and strategic plan indicate that officials are prioritizing a small initial pipeline of acquisitions, which they say could be ready for purchase once the revenue starts to flow.
Why it matters
The council's move comes as Seattle leans into broader housing investments in the mayor’s proposed budget. A city presentation reviewed by councilmembers shows roughly $349.5 million in proposed housing investments for 2026. According to that budget presentation, the larger funding package, combined with the new social housing tax revenue, is meant to strengthen multifamily capital development and long-term affordability across the city. Councilmember Dan Strauss called the vote "a major ongoing investment in permanently affordable, publicly owned social housing," as reported by KING 5.
What comes next
Under the interlocal agreement framework discussed in committee, the City will require the developer to submit annual spending plans and documentation before net proceeds are released, with the schedule prioritizing repayment of any bridge loan and administrative costs first. Advocates, housing providers and councilmembers say they will be watching closely to see how quickly the developer can turn those first dollars into real acquisitions and tenant-ready units. The developer's RFI and the council packet lay out near-term criteria for projects and the reporting expectations the agency will have to meet. For a deeper dive into the fine print, readers can review the council materials and the developer's RFI posted online.
