![]() ![]() These fees require for-profit developers to set aside a certain proportion of units as affordable housing, or to pay the cash equivalent of such to the housing trust. “In-lieu-of” fees operate in a similar way to facilitate inclusive zoning – in other words, a mix of affordable and luxury housing. These funds are then siphoned to a trust, typically dedicated to subsidising affordable housing projects. ![]() As such, if a business wants to undertake that activity, it should expect to pay a fee to offset the damage caused. Linkage fees work on the premise that certain business activity can have harmful social impacts, such as displacement or overcrowded schools. In America, corporate linkage fees are a popular way of ensuring that affordable housing is made available as a part of new developments or other for-profit ventures that are not necessarily property related. As with other corporate taxes, revenues will be pooled with other receipts to fund an array of public services such as police, fire, roads and infrastructure.īut there are more effective market-based mechanisms than taxes if the aim is to fund affordable housing programmes (homelessness initiatives included). The reality is that the extra charge being imposing on companies such as Amazon will not directly fund homelessness programmes. A more cynical reading of this story is that the rationale behind the tax hike is entirely political, in a city where progressive policies win votes. But these posturings mask the fact that Seattle City Council’s tax on big businesses is not actually a particularly radical policy. The vehement objections from both sides have caused something of a global stir over the tax, with some holding Seattle up as an example for other cities to follow. This is no small threat, at a time when the retail giant is considering 20 other American cities to host the company’s second headquarters. When the US$500 per employee levy was proposed, Amazon put its plans for expansion – which would add a further 7,000 people to it’s 45,000-strong workforce in the city – on hold. But many locals and activists were frustrated that the council did not bring in a higher charge of US$500 per employee, which would have raised upwards of US$75m.Īs expected, the business community reacted by threatening to terminate key investment plans and look elsewhere for opportunities. It is forecast to raise roughly $48m each year, which the city council intends to spend on affordable housing projects and services for the homeless.Ĭouncillors have lauded the tax as a way to offset Washington state’s “regressive” tax system, address homelessness and provide some affordable homes in city where the median house price has risen to US$820,000. The increased tax rate will apply to businesses earning more than £20m in gross annual revenue. Seattle’s city council has voted unanimously to levy a tax on big businesses, equivalent to US$275 for each full-time worker, starting from 2019. ![]()
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