OFFICIALS in Seattle have unanimously approved a tax on large businesses such as Amazon and Starbucks to fund the fight against homelessness after weeks of heated debate.

The city council backed a compromise plan that will charge large businesses about $275 per full-time worker each year, less than the $500 per worker initially proposed. The so-called head tax would raise about $48 million a year to pay for affordable housing and homeless services.

The debate over who should pay to solve a crisis exacerbated by Seattle’s rapid economic growth comes amid rocketing housing prices and rising homelessness.

The Seattle region had the third-highest number of homeless people in the US and saw 169 homeless deaths last year.

Council members who sponsored the initial proposal said $48m dollars a year was not enough to address the city’s urgent housing needs but conceded they could not get the six votes needed for a larger tax and to override a potential veto by the mayor, who favoured a lower rate and faced intense pressure from businesses.

Amazon raised the stakes this month when it halted construction planning on a 17-storey tower near its hometown HQ as it awaited a vote. It also was rethinking filling office space in another leased building. The two office spaces would accommodate about 7000 new Amazon jobs.