Salishan was built in 1943 to house up to 2,000 families of workers employed in World War II shipyards. Some of the units were built for temporary use, but most were intended as permanent structures. When World War II ended, the need for housing continued as discharged veterans built families. In 1950, the City of Tacoma had to decide what to do with several properties built for war workers, whether to sell the land and buildings or to convert to low-income housing. The Tacoma Housing Authority recommended converting units at Lincoln Heights and Salishan to low-income housing.
The Tacoma Real Estate Board opposed the move, charging that to do so would remove valuable property from the tax rolls. The housing projects paid 10 percent of shelter rents to the City and County to reimburse for services and infrastructure, but the Real Estate Board found flaws with this. The share was only paid for rented properties and the rent subsidies came from tax monies. The Board took out paid ads in the News Tribune advocating a popular vote on the plan. In a compromise, the Tacoma Housing Authority recommended that Lincoln Heights be sold and that 900 Salishan units be retained for low-income housing.