Seattle enthusiastically voted to tax itself to create social housing. Somehow, instead, we have a Seattle Social Housing Developer that will not open new homes until 2029. Despite receiving $115 million this year — enough to build two or three apartment buildings free of private investment — the Seattle Social Housing Developer is about to borrow $165 million from the private market by issuing bonds, tying the agency to providing returns to private capital in the form of fees and interest payments. SSHD plans to use those dollars to buy existing housing rather than add to Seattle’s housing stock.
Might an acquisition that preserves affordability, significantly rehabilitates damaged buildings and/or replaces a hypothetical bad landlord with an inexperienced but well-meaning landlord be helpful? Maybe. If SSHD somehow manages to cut rents and still maintain buildings well, and if the existing residents are willing and able to participate in the resident governance the developer aspires to, then maybe those expensive acquisitions will be helpful to some existing residents. Will that materially contribute to addressing Seattle’s housing crisis? No.
The Seattle Social Housing Public Development Authority was established three years ago. In that time, it has created zero homes. It has created no development pipeline. It has, however, spent and obligated millions of dollars to hire and fire a CEO who never lived in Washington state, pay questionable consultants and embark on a hiring spree.
Conventional real estate owners and investors advised SSHD to purchase a portfolio first. This is an efficient strategy if you are profit-motivated and have the experience and capacity to manage the tremendous risks of multifamily real estate ownership and management. We voted to create and fund the Seattle Social Housing Developer to develop homes free of the market, not to create yet another landlord. And while the SSHD might be a well-intentioned landlord promising rents at 30% of income and resident governance, it will also be a landlord with zero experience managing properties, zero experience owning properties and questionable capacity to do so. Why should the SSHD take on the risks of ownership before it is ready? Maybe the SSHD is just rushing to show it can do something, anything at all.
A more productive strategy would have seen SSHD spend the last few years completing predevelopment on a development pipeline so it would have been able to immediately use its $115 million to break ground on a development this spring. Having failed that already, the SSHD could still potentially break ground on new homes quickly in 2026 by purchasing development rights from other mission-aligned housing developers who have pipeline projects waiting for funding (or more simply, just fund those experienced nonprofits to undertake construction on SSHD’s behalf). Focusing on new construction would add the badly needed homes that Seattle repeatedly votes to tax itself to fund. Further, the 18-to-24-month construction period would give SSHD adequate time to build its capacity for ownership and management as a new organization.
In the last decade, Seattle built up affordable housing funding sources, an Office of Housing and an ecosystem of nonprofit developers and owners. Seattle has decades of experience providing thousands of affordable homes. And while a leader in the United States, our affordable housing efforts have been inadequate. We are too slow and too complicated. Our conventional affordable-housing world is hamstrung by layers of requirements and inefficiencies from federal, state, county and local governments, plus a dependence on private capital in the forms of debt and tax credit equity.
Seattle’s Social Housing Developer has a golden opportunity to do better. It could build affordable housing without the strings and complications of federal and state funding and without the need to provide the investor and lender returns that eat up about 20% of the cost of conventional affordable housing. I worry the SSHD is about to throw that opportunity away.
Seattle didn’t vote for a jobs program or a nicer landlord. We voted to develop social housing. Let’s not squander the opportunity to do so.
