Amazon and Starbucks have hit out at a decision to impose a new tax to help fight homelessness in Seattle.
Seattle is introducing a new tax on large employers that will help fund homelessness and affordable housing programs—despite opposition from major companies such as Amazon and Starbucks.
The Seattle City Council voted unanimously for the new tax, saying it will raise $47m to tackle a housing affordability crisis due to a recent economic boom. But local firms claim it will kill jobs and investment.
Amazon, the U.S. city’s number one employer, said the levy could put future expansion on hold in the region.
“We remain very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses,” said Amazon’s vice president Drew Herdener following the vote. “[It] forces us to question our growth here.”
Meanwhile, Starbucks said: “This City continues to spend without reforming and fail without accountability.”
The tax will apply to companies with annual sales of least $20m a year, working out at about $275 annually for each worker. The money will be spent on building more affordable housing and support services for the homeless.
Supporters of the tax cite data showing Seattle’s median home prices have soared to $820,000, and more than 41% of renters are classed as “rent-burdened.” That means they spend around a third of their income on housing.
Seattle: the third-largest concentration of homeless people in the U.S.
The levy is expected to be imposed on about 500 companies, including Seattle-headquartered firms such as department store chain Nordstrom and coffee chain Starbucks.
It will also affect the California-based tech giants Apple, Google and Facebook, which have a big presence in the city. But Seattle’s Chamber of Commerce said that “taxing jobs will not fix our region’s housing and homelessness problems”.
And Amazon, which has led local business opposition to the levy, previously warned the levy could put more than 7,000 new jobs at risk.
Following Monday’s vote, the e-commerce giant said it would go ahead with plans to build a major new office building in the city centre, despite an earlier threat to shelve the move.
However, it said it was now evaluating whether to lease space in a second office tower, meaning it may move some planned jobs elsewhere.
John Kelley, senior vice president for Starbucks Global Public Affairs, said: “No one believes they will be able to make housing affordable or address opiate addiction [through this tax].”
In the opinion of CNN Money analyst Dylan Byers, both sides are to blame for complicating the issue. In an op-ed published May 15, he wrote: “The homelessness epidemic is the inconvenient truth of the tech boom that has fueled growth in Seattle, the Bay Area and Los Angeles, and its a problem for both city governments and the tech companies in their area.
“City leaders and tech CEOs should own it,” he continued. “There is a massive opportunity to innovate on solving this issue. Doing it now would save lives (and generate good press). Avoiding it will yield massive problems down the line.”