A new report from the Downtown Seattle Association (DSA) reveals that downtown Seattle has lost approximately 30,000 jobs and more than $10 billion in office value since the implementation of the "JumpStart" payroll tax in 2020 [1]. The report highlights that the office vacancy rate in downtown Seattle has surged to 32%, and office property values have fallen by 48% since 2019 [1]. In contrast, neighboring Bellevue, which does not have a comparable payroll or social housing tax, has experienced a 7% increase in assessed office property value and a lower office vacancy rate of 24% since 2020 [1].
The DSA report draws a direct comparison between the two cities, attributing Bellevue's resilience and growth to its more favorable tax environment, including a smaller property tax millage rate projected for 2026 [1]. The report concludes that Bellevue's tax climate has made it increasingly attractive to employers and investors relative to Seattle [1].
Seattle Mayor Katie Wilson, however, defended the JumpStart Payroll Expense Tax, stating that it was a key factor in the city's ability to recover from the worst economic impacts of COVID-19 [1]. According to Wilson, the tax, which targets the highest salaries at the largest corporations, has generated more revenue than initially projected and has helped the city avoid deep budget cuts that could have negatively impacted the local economy [1].
The DSA's findings suggest significant market implications for Seattle's commercial real estate and employment landscape, with the contrasting performance of Bellevue underscoring the influence of local tax policy on business decisions and investment [1].
CONCLUSION
The DSA report indicates that Seattle's downtown has faced substantial job losses and a sharp decline in office property values since the introduction of the JumpStart payroll tax, while Bellevue has seen growth in both areas. The findings highlight the impact of tax policy on urban economic health and suggest that Seattle's business environment may be less attractive compared to its neighbor.