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Seattle committee reviews interlocal agreement to transfer social housing tax proceeds to developer
Summary
City finance staff briefed the committee on an interlocal agreement to transfer proceeds from the voter‑approved 5% social housing tax to the Seattle Social Housing Developer, including a temporary $2 million loan and a March 2 transfer timetable; the ordinance returns for a Feb. 3 vote.
Chair Dan Strauss convened the Finance, Native Communities and Tribal Governments Committee on Jan. 20 to review an ordinance authorizing an interlocal agreement (ILA) for transferring proceeds from Seattle’s voter‑approved social housing tax to the Seattle Social Housing Developer (SSHD).
City Finance Director Jamie Carnell told the committee the tax is a 5% levy on employees doing business in Seattle and — as described in the presentation — is retroactive to Jan. 1, 2025. Carnell said the City is “bound by I 1 37 to transfer the proceeds to the developer.” The ILA is the mechanism the City will use to collect the tax, document administrative responsibilities, reimburse implementation costs, and schedule transfers.
Carnell described a temporary loan to the developer of up to $2,000,000 entered because 2025 tax proceeds will not be collected until Jan. 31; the loan principal is capped at $2,000,000 and interest will accrue at the City’s cash pool rate. Carnell said both loan principal and interest will be reimbursed from the first tax collections, and the planned order of disbursement is: loan interest, loan principal, administrative implementation costs, then net proceeds transferred to the developer. Carnell also outlined a drafting timeline and said the ILA must be in effect before the initial transfer, which staff intends to initiate on March 2.
Jennifer Labrec of Council Central staff clarified the legal distinction between the voter initiative and the ILA: “I 1 37 was passed by voters, in February 2025,” and Labrec said the initiative cannot be changed for two years, meaning the City cannot impose additional conditions on transfers during that period. She added that council can amend the ordinance authorizing the executive to enter into the ILA, but changing the ILA itself would require negotiation with the developer and the developer’s board and would add time to the process.
Council member Foster, a cosponsor of the ordinance, said the work is an important step toward getting social housing online and welcomed continued collaboration between the City and SSHD. Council member Kettle urged keeping the focus on “nuts and bolts, basic, good governance” and asked the developer to engage with the City and KCRHA lessons to avoid duplication and ensure social housing complements existing affordable and permanent supportive housing efforts.
No vote was taken. Chair Strauss said the ordinance and its attached ILA will return to committee on Tuesday, Feb. 3, when the committee expects to vote on the matter. The committee adjourned after thanking Director Carnell for her service.
