CITY OF SEATTLE
ORDINANCE __________________
COUNCIL BILL __________________
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AN ORDINANCE relating to the financing of the Seattle Social Housing Developer; authorizing the Director of Finance to enter into a loan agreement with the Seattle Social Housing Developer; authorizing a loan of funds in an amount up to $2,000,000 from the General Fund as bridge financing to be repaid from future tax proceeds; and ratifying and confirming certain prior acts.
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WHEREAS, on February 14, 2023, Seattle voters approved Initiative 135, a citizen-initiated measure to create an independent public development authority, the Seattle Social Housing Developer, to develop, acquire and maintain public affordable social housing in Seattle; and
WHEREAS, Initiative 135 required The City of Seattle to provide start up support for the first eighteen months of operations; and
WHEREAS, in 2023, the City Council funded $20,000 in consulting assistance and the State provided $180,000; and
WHEREAS, the City appropriated $850,500 for the Seattle Social Housing Developer in its 2024 budget and executed a contract with the Seattle Social Housing Developer effective for 18 months (January 1, 2024 through June 30, 2025); and
WHEREAS, the City released the last tranche of funding owed to the Seattle Social Housing Developer on March 4, 2025 for $445,500; and
WHEREAS, on February 11, 2025, Seattle voters approved Initiative 137, imposing a five percent tax rate on employers doing business in Seattle for any annual employee compensation above $1,000,000 (the “Social Housing Tax”), which the City is responsible for collecting and transferring to the Seattle Social Housing Developer and is intended to support the development and operation of social housing in Seattle; and
WHEREAS, although the Social Housing Tax was imposed effective January 1, 2025, due to the normal due dates and collection procedures, the first proceeds of the Social Housing Tax will not be received in the City’s Social Housing Fund until January 2026. Because of this lag, the Seattle Social Housing Developer has requested a bridge loan from the City to cover staffing and other operational costs in 2025; and
WHEREAS, the Director of Finance and the City Budget Director have determined that this loan to a public development authority does not constitute use of the City’s debt capacity and is consistent with the Debt Management Policies adopted by Resolution 31553; and
WHEREAS, before the Office of City Finance can enter into an agreement with the Seattle Social Housing Developer for a bridge loan, City Council authorization is needed; NOW, THEREFORE,
BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:
Section 1. The City finds and declares:
A. Initiative 137, as codified at Seattle Municipal Code Section 5.37.070, requires that revenues received from the Social Housing Tax are to be allocated and promptly transferred to the Seattle Social Housing Developer.
B. The Seattle Social Housing Developer has requested a loan from the Social Housing Tax proceeds, to be repaid out of those proceeds immediately upon collection, to allow the Seattle Social Housing Developer to continue its operations as planned until the 2025 Social Housing Tax proceeds are collected in 2026. Any disruption to the Seattle Social Housing Developer’s operations could lead to increased costs in the long term.
C. It is in the City’s best interests to make a loan to be repaid immediately out of proceeds of the Social Housing Tax as such proceeds are collected on the terms described in this ordinance. This loan is found to be the most efficient and financially responsible way to provide interim funding to the Seattle Social Housing Developer to enable it to carry out its mission.
Section 2. The Director of Finance is authorized for and on behalf of The City of Seattle to enter into a loan agreement with the Seattle Social Housing Developer, substantially in the form of the attached Exhibit 1, for an amount up to $2,000,000. The City Finance Director is authorized to negotiate, execute, and deliver the loan agreement consistent with the terms set forth in Section 3 of this ordinance, and any and all contracts or other documents necessary or desirable to effectuate the making of the loan to the Seattle Social Housing Developer for the purpose of providing bridge financing for staffing and other operational costs.
Section 3. The Director of Finance is authorized to make a loan, in one or more non-revolving loan draws, totaling up to $2,000,000 in principal amount, plus interest, to the Seattle Social Housing Developer from the General Fund. The loan is to be repaid by no later than December 1, 2026, with interest on the loan at the rate of return of the City’s Consolidated Cash Pool, which shall accrue from the date of each loan draw. The entire principal of and interest on the amount of the loan drawn is intended to be repaid with future proceeds of the Social Housing Tax, prior to the transfer of proceeds of such tax to the Seattle Social Housing Developer.
Section 4. Any act consistent with the authority of this ordinance taken prior to its effective date is ratified and confirmed.
Section 5. This ordinance shall take effect as provided by Seattle Municipal Code Sections 1.04.020 and 1.04.070.
Passed by the City Council the ________ day of _________________________, 2025, and signed by me in open session in authentication of its passage this ________ day of _________________________, 2025.
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President ____________ of the City Council
Approved / returned unsigned / vetoed this ____day of _______________, 2025.
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Bruce A. Harrell, Mayor
Filed by me this ________ day of _________________________, 2025.
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Scheereen Dedman, City Clerk
(Seal)
Attachments:
Exhibit 1 - Loan Agreement between City of Seattle and Seattle Social Housing Developer