Seattle's Affordable Housing Goal Remains Elusive Despite Millionaire's Tax

The city's Social Housing Developer aims to acquire existing rental buildings instead of building new units, raising concerns about the program's effectiveness.

Apr. 18, 2026 at 6:13am

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A serene, cinematic painting of a single apartment building in Seattle, with warm sunlight casting long shadows across the facade, conveying the quiet struggle to address the city's affordable housing crisis.As Seattle struggles to build enough affordable housing, the city's new tax on businesses with millionaire employees faces early challenges in translating revenue into new units.Seattle Today

Seattle's version of a tax on millionaires, aimed at businesses with high-earning employees, was meant to fund the expansion of affordable housing. However, the city's Social Housing Developer has revealed that its initial moves will be to acquire two existing occupied market-rate rental buildings rather than create any new housing units. Officials say new construction will take longer, raising questions about the program's ability to meaningfully address the city's affordable housing shortage.

Why it matters

Seattle's affordable housing crisis has persisted for years, with estimates of over 100,000 units needed in the next two decades. The Social Housing Developer's tax on businesses with millionaire employees was intended to provide funding to address this issue, but the focus on acquiring existing buildings rather than building new units has sparked concerns that the program may not be as effective as hoped.

The details

The Social Housing Developer plans to use $133 million in tax revenue received in January to acquire two existing occupied market-rate rental buildings, rather than immediately focusing on new construction. Officials say new housing will take longer, with the goal of starting pre-development on some sites this year and potentially having new units online by 2028 or 2029. The decision to acquire existing buildings is driven by the lengthy permitting process for new construction in Seattle, which can discourage building altogether. However, critics argue that this strategy does not add the new housing units the city desperately needs.

  • The Social Housing tax on businesses with millionaire employees went into effect for the 2025 tax year, with the first payments submitted in January 2026.
  • The Social Housing Developer plans to close on the acquisition of its first building in June 2026.
  • The Social Housing Developer expects to acquire a second rental building later in 2026.

The players

Tiffani McCoy

The interim CEO of the Seattle Social Housing Developer, who took over the role after the previous CEO was fired just 18 months into the job.

Lilly Fowler

The spokeswoman for the Seattle Social Housing Developer.

Jon Scholes

The president and CEO of the Downtown Seattle Association, who has criticized the Social Housing tax as damaging to the city's competitiveness.

Shannon Affholter

The co-chair of the Department of Real Estate at the University of Washington in Seattle, who has said the city's lengthy permitting process discourages new construction.

Katie Wilson

The new mayor of Seattle, who was a community organizer and credited the Social Housing referendum as a key reason she ran for office.

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What they’re saying

“'It's very exciting, but just remember, it takes a long time for new construction to come online, so we're hoping by the end of 2028, early 2029, but at least we are going to be starting pre-development this year on some sites.'”

— Tiffani McCoy, Interim CEO, Seattle Social Housing Developer

“'Seattle is a business tax outlier in the region. That fact has been damaging to our competitiveness, and we've been shedding jobs the last couple of years as a result. We don't need more business taxes in Seattle; we need more businesses in Seattle paying taxes.'”

— Jon Scholes, President and CEO, Downtown Seattle Association

“'When approvals stretch out for years, it discourages building altogether. Buying existing properties may be faster, but it doesn't add the new housing units the city really needs.'”

— Shannon Affholter, Co-chair, Department of Real Estate, University of Washington in Seattle

“'There is a lot of wealth in the city, and we continue to have one of the most regressive tax systems in the country, in the state. And it is very gratifying to know that we're going to be able to use a little bit of that wealth and put it to work building housing.'”

— Katie Wilson

What’s next

The Social Housing Developer is expected to release updated projections on the number of units it plans to build and acquire, as the original estimates were based on an expected $50 million in annual tax revenue, which has now exceeded $130 million. The city's lengthy permitting process for new construction remains a key challenge that could slow the program's progress.

The takeaway

Seattle's ambitious plan to use a tax on businesses with millionaire employees to fund affordable housing is facing early hurdles, as the Social Housing Developer focuses on acquiring existing rental buildings rather than building new units. This strategy raises concerns about the program's ability to meaningfully address the city's affordable housing crisis, underscoring the need for reforms to streamline the development approval process and ensure the tax revenue is used effectively to create new housing.