The Seattle Social Housing Developer (SSHD) has announced its first acquisition, a 150-unit apartment building in the heart of downtown. It plans to turn half of these units into affordable housing.
The building, called the Elara at the Market, is a few blocks north of Pike Place Market. SSHD expects to close the sale in mid-June for $60.9 million, or about $400,000 a unit.
At the board of directors meeting on Thursday night, SSHD director of acquisitions James Mayton said he expects the Elara to net a $2 million annual profit, even after accounting for the rent reductions for affordable units.
At a sunny Friday morning press conference on the waterfront, SSHD Interim CEO Tiffani McCoy called the acquisition a milestone for Seattle’s social housing movement. McCoy herself helped co-found the advocacy group House Our Neighbors (HON), which spearheaded the passage of two ballot initiatives in 2023 and 2025 to establish and fund the SSHD.
“It’s currently a private asset, and we will be bringing it into public ownership,” McCoy said. “The building itself has 150 units, all in excellent condition.”
As soon as next month, social housing will no longer just be an idea or concept, but actually operate buildings and rent them out to tenants.
Demonstrating Good Landlordry
The agency’s staff is keen to prove its bonafides as a good landlord. It will not kick out any existing tenants and will offer them a two-year rent freeze. McCoy said SSHD will scrap “junk” fees and the existing ratio utility billing system and provide every resident with a free ORCA transit card.
Additionally, SSHD plans to introduce a resident governance system, allowing ordinary tenants to make decisions about their apartment building and eventually elect a majority of the seats on the agency’s board.
Built in 2018, the Elara is considered a high-end apartment building. Mayton said it will not need major upkeep or renovations, though SSHD does intend to swap the gas-powered water boilers for electric ones to reduce cost and greenhouse gas emissions.
SSHD has already opened up an application form for prospective tenants, and plans to make 15 units available via lottery to people making 30 percent or less of the Area Median Income (AMI), which is $39,480 a year for a two-person household. The application form closes June 5.
As existing residents cycle out over time, SSHD will make more low-income units available, with 45 units to be affordable for people making 30 to 50 percent of the median income and a further 15 units for people under 80 percent AMI. The 75 remaining units will continue to be leased at market rates.
Ambitious Expansion Plans
Over the next six years, SSHD plans to acquire or build 1,800 units. It will frontload its portfolio with purchases of market-rate properties like the Elara before constructing its own buildings. These new projects are expected to be built by 2028 at the earliest.
McCoy said that by the end of the year, SSHD plans to buy a second apartment building and secure four land plots for future development. It plans to specialize in family-sized units and will build to passive house sustainability standards.
Financing for the agency primarily comes from the city’s 5 percent corporate tax on payrolls in excess of $1 million. Last year, it brought in $134 million for SSHD, more than the 2.5 times initial projections.
The agency plans to utilize what is known as a “revolving capital fund,” issuing $60 million in municipal bonds to finance the acquisition, allowing the agency to immediately purchase or develop new buildings without depleting all of its existing funds.
The urgency of SSHD’s plans may also be intended to win confidence from the public. With high expectations and a chronic housing crisis, there is little room for error. In January, the agency’s former CEO Roberto Jimenez was ousted over performance concerns. Social housing supporters will hope that concrete results will assuage the skeptics.
SSHD differs from traditional nonprofit or governmental housing providers in a few ways. Firstly, it is not seeking any federal funds or competing for local and state affordable housing dollars. SSHD will largely rent to middle-income earners, using those profits to pay for a portion of its buildings that will be set aside for low-income households.
It is also trying to change the perceptions around what public housing should look like. By purchasing a luxury apartment building like the Elara, McCoy says that social housing can provide everyone, regardless of incomes, a high-quality home.
“Voters and people in the public didn’t want the social housing developer to recreate what happened with public housing, which was disinvested by the federal government,” McCoy said. “We want to build high-quality assets that are permanently affordable and publicly owned forever.”
Putting the Model to the Test
Today’s news has wider ramifications of housing advocates across the country. When HON was formed in 2021, only Montgomery County, Maryland operated a mixed-income public housing program without federal subsidies. The cross-subsidization model, which is common in Vienna, Singapore, and many other cities around the world, was virtually untested in the US.
Now advocates and elected officials from New York City to Portland across are eyeing similar initiatives to SSHD.
At the press conference, Seattle City Councilmember Alexis Mercedes Rinck said she was proud of the city’s leadership within the broader social housing movement.
“Cities from across the country are watching what we’re doing here, and what we are doing here today is leading a national conversation,” Rinck said.