(The Center Square) - Seattle’s Social Housing Developer now has the power to issue bonds, a tool it plans to use to leverage financing to purchase or build more apartments.
The controversial program is funded by taxes on Seattle businesses that have employees who make more than $1 million a year.
The Seattle City Council unanimously approved charges to the Social Housing Developer’s charter on June 15, a move that Councilwoman Dionne Foster, who sponsored the legislation, said would enable the authority to create more apartments.
“These changes are for the developer — to address our housing crisis, and for future residents — to lower barriers to get into affordable housing and help them stay in those homes,” she said in a statement after the passage of the legislation.
The organization received $116 million from the city of Seattle this year, which collects the tax, but won’t receive a new allotment of funds until 2027.
The charter change indicates that the collateral for the debt would consist of existing buildings owned by the social housing developer.
City taxpayers would not be asked to pay the bond debt, according to the charter changes.
So far, the social housing developer has purchased only one building: the 150-unit Elara at the Market apartment building in Belltown for $54.1 million.
The charter changes would also allow the Seattle Social Housing Developer to bundle retail space in buildings it acquires and sell it as condominiums to private developers.
Another change would require eviction hearings before a tenant could be removed from an apartment building.
Seattle voters overwhelmingly approved legislation in 2025 that taxes companies with high-earning employees. Five percent of compensation exceeding $1 million goes to the Social Housing Developer.
The legislation was passed despite a massive campaign by Amazon and other Seattle tech businesses to defeat the measure.
The acquisition of the social housing developer's first building has also become controversial because the developer initially chose to buy a luxury, market-rate rental building rather than build new housing with multiple affordable units.
Tenants in the 150-unit luxury building, called the Elara at the Market, are being allowed to stay, so affordable units only become available as apartments become vacant.
More than 10,000 applicants competed for around 15 available units earlier this month.
Critics say buying existing apartment buildings won’t create new affordable housing for the poor on a larger scale.
“With only a small number of new units becoming available, it will do little to address the needs of hundreds of people seeking affordable housing,” Shannon Affholter, the Co-Chair at the Runstad Department of Real Estate at the University of Washington, told the Center Square on June 8.
Mike Eliason, director of design and policy for the Seattle Social Housing Developer, told the Seattle Planning Board that the commission's next steps are to construct new rental buildings.
"We're currently looking at several projects around the city,” Eliason said. “Our goal is to be in every district. We don't want to be concentrated in any one neighborhood. We're going to be spread out around the city, and so we're kind of looking all over the place right now.”
Over the next five years, he said, the agency plans to acquire 1,040 units and build 630 units, for a total of 1,670 housing units.
