King County report holds lessons for Multnomah County: Solving homelessness demands affordable housing

A consultant studying Seattle and King County's response to homelessness says high, rising rents are strongly correlated with that community's rise in homelessness -- suggesting that affordable housing, more than any other intervention, is the most important solution for helping people off the streets.

The report by McKinsey & Company was done pro bono for King County's chamber of commerce. It says the private sector would be better served by investing in housing rather than strategies like shelter alone.

The report also found rent hikes, a measure of economic instability, were almost three times more likely to correlate with homelessness as opioid deaths. That's despite the common but mistaken assumption, often driven by visibility, that non-economic factors are more responsible for homelessness.

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That rings familiar in Multnomah County, which has balanced an expansion in shelter with steady investments in affordable housing, rent assistance and housing placements.

Housing placements have increased 65 percent since 2013, reaching a record 4,900 in the 2017 fiscal year. The number of people receiving homelessness prevention assistance also has increased dramatically, exceeding more than 6,000 in the last fiscal year.

But affordable housing also remains in short supply here. Oregon Housing and Community Services' housing profile of Multnomah County shows the region short more than 25,000 housing units affordable for households making less than 30 percent of the region's median income.

Among the very similar King County findings spotlighted by McKinsey:

  • In King County, as rents climbed, the stock of affordable units fell by 13 percent a year between 2014 and 2016, such that in 2017, some 22,000 households sought help from the county’s homeless services, but only about 8,000 affordable units were available. The homeless population had to compete with higher-income individuals for these units.
  • Some corporations keen to alleviate homelessness in their local communities already fund emergency shelters. These are crucial. But they are not a long-term solution. Affordable housing is. Partnerships with local governments to support more of it could therefore be one of the best ways for companies to do more.

The Seattle Times also noted some additional context from McKinsey that may hold lessons for Portland and Multnomah County. Among them, the kind of increased efficiency our system has gained in recent years, after the creation of the Joint Office of Homeless Services and A Home for Everyone, won't come close to matching the impact of adding actual housing.

"Recent improvements in King County’s homelessness-response system have resulted in more exits to housing, increasing by 35 percent between 2016 and last year. But, while helpful, that alone cannot make up for the region’s affordable housing shortage.

"There is a 96 percent statistical correlation between the region’s rent increases and the increase in homelessness, a finding that echoes an analysis by Zillow Research, which found those relationships strong in Seattle, Los Angeles, New York and Washington, D.C.

"McKinsey found the correlation between opioid deaths and homelessness to be far lower, at 34 percent — an indication that, counter to some assumptions, drug use alone isn’t driving the dramatic rise in homelessness here."