The real estate community welcomed a change of heart by the Seattle City Council this week after it put an unpopular head tax on large businesses just a month ago.

The city of Seattle voted last month to have large businesses pay an annual tax of $275 per employee, the anticipated revenue of $47 million to go toward helping the homelessness problem in Seattle’s downtown, but vocal criticism by big corporate names in Seattle including Starbucks and Amazon made the council reconsider. Amazon has around 45,000 employees in Seattle so it would have been up for a $12 million bill.

A leading critic in the real estate industry on the head tax was Matthew Gardner, chief economist at Seattle-based Windermere Real Estate, who wrote a white paper against the head tax when it was going to be $500 per employee.

Gardner said in an email to Inman: “I don’t think that it should take anyone by surprise that the council repealed this poorly thought out tax. Council members were deaf when it came to not only the business community, but also to the majority of Seattle’s citizens who saw it as an attack on businesses that could have severely slowed our local economy.”

Homelessness and housing affordability are certainly very important issues that need to be addressed but this was not the right path to take, he said.

Jennifer Johnsen Cameron, director of Coldwell Banker Bain’s Global Luxury division, said she didn’t think Seattle officials had a choice in their decision to reverse the move.

“People were not going to settle for anything less. It was a bad decision. And I am very happy that they have repealed that tax. Now, if they could come up with a better strategy to deal with the issues that we’re facing, I’m all for it. But again the keyword here is strategy,” she said.

Redfin CEO Glenn Kilman criticized the head tax in May saying the aim of government should be to encourage employment not penalize it.

Redfin spokeswoman Alina Ptaszynski told Inman in an email: “We will continue to work with the city council and others in the business community on solutions. We believe that the solution must include reforming zoning laws to allow more density and more housing to be built. Redfin has said all along that ​we’d be willing to pay more taxes to fund affordable housing programs, but we believe a tax on revenue or income​​ is a better option than a tax on employment.”

Email Gill South

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