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On the Heels of Amazon Killing a Seattle Head Tax, Paul Allen Gives $30 Million for a New Housing Complex

September 18, 2018, 11:15 PM UTC

In Seattle’s superheated real-estate climate, Microsoft co-founder Paul Allen and the city’s government have collaborated on a $46 million apartment complex designed to house 94 homeless or low-wage families. Allen contributed $30 million in the largest single donation in Washington’s history for a single housing or homelessness project. Allen has a major financial and philanthropic presence in the Seattle, and his real-estate firm is responsible for many buildings Amazon now occupies as part of its spread-out campus downtown.

Located close to a stop on the city’s relatively new light-rail backbone, the housing project, which had its groundbreaking ceremony Tuesday, has half its units reserved for short-term and long-term occupancy by homeless families. The other units will be offered to low-income families, which earn about $27,000 to $54,000 a year for a family of three in Seattle.

Rent across the greater Seattle area has grown 60% since 2011, and Seattle has the fifth-highest median rent in America. The median family income in Seattle is $121,000, while it requires annual income of about $93,000 to buy a median-priced house in the city with a 20% down payment.

Allen’s gift and the complex’s groundbreaking comes just days after Amazon founder Jeff Bezos and his wife, Mackenzie Bezos, announced the Bezos Day One Fund, a $2 billion charitable fund that will provide annual grants to leading charities working with young families on the immediate needs of shelter and food. Amazon itself has a several-year-long partnership with local charity Mary’s Place, which provides temporary housing and extensive social and job services largely to women and family during times of crisis.

But it also follows Amazon’s successful effort to kill a per-employee tax for high-revenue companies in Seattle that was initially designed to provide $47 million in annual funding for homeless and housing programs. Controversy continues over whether the repeal of the tax violated state open meeting laws, currently in litigation, and just today more messages were released via a public-records request by The Seattle Times that showed discussions between officials and head-tax proponents.

Seattle and its county, King, suffer from among the highest incidence of homelessness in the U.S. among major cities. A report estimates that the city and county need to spend over $400 million a year combined to provide effective solutions, or about twice current spending levels.

Washington State’s constitution prohibits a state-wide income tax, and appears to prohibit cities from collecting similar taxes, although that hasn’t yet been tested at the state supreme court. A state business and occupation tax is levied against gross profits, but capital gains from employee and corporate stock ownership are untaxed at a state level. To settle a school underfunding decision by the state supreme court, property tax spiked 15% year-over-year, and sales tax already tops 10% in Seattle and other parts of the state.

Allen’s gift is joined by $5 million in city money and $10.7 million in tax credits for low-income housing.