Summarize this content to 2000 words in 6 paragraphs
(GeekWire File Photo / Kurt Schlosser)
Seattle voters are showing support for a new tax on big business that would fund a social housing developer.
More than 57% of voters said “yes” to the proposed tax, based on initial results posted Tuesday for Seattle’s special election.
The ordinance, known as Proposition 1A, would create a 5% tax on annual compensation above $1 million paid in Seattle to any employee. For example, if an employee earned $2 million, the company would pay $50,000 for the tax. The compensation includes base salary, stock, and bonuses.
The money would go toward a public development authority created to develop, own, and maintain social housing in Seattle. The tax would generate $50 million annually, according to supporters.
Proposition 1B, on the other hand, would allocate $10 million from an existing payroll tax to support the acquisition and development of social housing in Seattle. It would also place more limits on the new developer and give the city more oversight.
Amazon and Microsoft each put up $100,000 in support of the Proposition 1B campaign — the largest contributions by far. Other companies including T-Mobile, Weyerhauser, Alaska Airlines, and Russell Investments also donated.
Large tech companies have been criticized in Seattle for driving up housing costs as high-paying jobs exacerbate the economic divide.
Both Amazon and Microsoft have previously allocated millions to fund various affordable housing projects in the Seattle area.
“Rather than creating a new tax on jobs, we see value in maximizing the city’s current revenue streams to better support this effort,” an Amazon spokesperson said in a statement.
“Prop 1B will allow the city to address housing needs without raising taxes that would jeopardize jobs or the revitalization of downtown Seattle,” a Microsoft spokesperson said in a statement.
Let’s Build Social Housing, the campaign behind Proposition 1A, addressed the concern that the new tax will harm revitalization efforts in downtown Seattle, which has struggled to bounce back from the pandemic and remote work trends.
“One of the best ways to revitalize downtown is to have people living there,” it says in an FAQ page. “This is the singular neighborhood with the largest housing density allowances by far in all of Seattle. We should be building, and creating, social housing downtown to kick start revitalization.”
The latest tax on big tech
Amazon CEO Andy Jassy, left, speaking with Seattle Mayor Bruce Harrell at an event last year when Amazon announced $1.4 billion of new funding for affordable housing in regions including the Seattle area, Nashville, Tenn., and Arlington, Va. (Geekwire File Photo / Taylor Soper)
The existing payroll tax, also known as JumpStart, passed in 2020 and evolved out of a years-long battle over how the city should tax employers such as Amazon.
The issue came to a head in 2018 when the City Council approved a per-employee payroll “head tax” that targeted large local companies, in an effort to help the city raise tens of millions of dollars to pay for the effects of explosive growth driven by the tech boom.
Amazon, which strongly opposed the tax, followed up by pouring money into city council elections and relocating thousands of employees from Seattle to nearby Bellevue, which it now considers part of its “Puget Sound” headquarters.
JumpStart was designed to pay for affordable housing and homeless services, equitable economic development projects, and Green New Deal investments to help the city meet its environmental goals.
The tax has brought in more revenue than expected since it passed in 2020 and is now being used to plug the city’s budget deficit.
Social housing
The Seattle Social Housing Developer formed in 2023 after voters approved a ballot measure, but it was unclear how the effort would be funded.
The Seattle City Council, with support from the Chamber of Commerce and Mayor Bruce Harrell, introduced Proposition 1B last year as an alternative option to Proposition 1A, which qualified for the ballot after collecting enough signatures.
Social housing is designed to be publicly owned with rent caps based on income, and serve a wide range of households. It’s picked up traction in some cities around the globe including Singapore and Vienna.
“Once we acknowledge that we cannot meet our affordability needs at scale, we can look outside (and inside) our borders to how other countries are housing their citizens,” Let’s Build Social Housing writes in its FAQ.
The program in Seattle would allow people earning up to $126,000 annually to participate. The idea, in part, is to have higher-income renters help subsidize costs for lower-income tenants.
Proposition 1B puts a lower income cap on potential social housing renters.
The special election ballot included two questions related to social housing. The first asked voters if either of the propositions should be enacted into law. Initial results show more than 68% of voters saying “yes” to the first question.
The second question was: “Regardless of whether you voted yes or no above, if one of these measures is enacted, which one should it be?”
Final voting results won’t be confirmed for several days. We’ll update this post with the latest voting data.
