Like other prosperous American cities, greater Seattle currently finds itself in the unenviable position of possessing both enormous amounts of wealth and staggering levels of homelessness. These slides accompany the McKinsey & Company report that looks at homelessness in King County, published in January 2020.

1. Copyright @ 2019 McKinsey & Company. All rights reserved.
January 2020
Supporting exhibits
https://www.mckinsey.com/industries/public-sector/our-insights/why-does-
prosperous-king-county-have-a-homelessness-crisis
Addressing
homelessness in King
County
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2. McKinsey & Company 2
We can address homelessness in Seattle
Homelessness is getting worse. Last year, 22,500 households experienced homelessness in Seattle, the
most ever
Prosperity is part of what is driving homelessness. Seattle’s job and population growth have been
remarkable. Our housing growth has been robust, but insufficient.
Additional affordable housing stock must be built. Particularly stock that is affordable for extremely-low-
income households (ELI), those earning less than 30 percent of the area median income, or about $28,800 per
year
Building this housing will require substantial incremental public spending two to five times more than
current local spending
Beyond just building, we need a multi-pronged approach to the problem—including a set of projects each
with short-, medium- and long-term targets and goals.

3. McKinsey & Company 3McKinsey & Company
Though the King County point-in-time (PIT) count
dropped in 2019, homelessness continues to increase
1. The annual PIT count is a physical count of people experiencing homelessness on a given night at the end of January
2. HMIS is a database of all households who accessed the homelessness response system in a given year. The data here is only
households who were homeless from January through December of indicated years.
3. Households that experienced homelessness in 2018 and were not exited to permanent housing situations by the end of the year
Sources: PIT counts reported to HUD (2009-2019); King County PIT count 2019 administered by All Home, HMIS
The PIT count showed a
decrease for the first
time in January 2019.
Our most comprehensive
data, from the King
County Homeless
Management Information
System (HMIS), shows a
continued increase in the
number of households
experiencing
homelessness.
The number of
households who
experienced homeless-
ness and remained
without permanent
housing is unchanged.
King County homeless population by year
Thousands of people1
Households experiencing
homelessness at any time in year
Thousands of households2
Permanent
housing remains
out of reach for
thousands of
families
2008
9.0
09
9.0
10
11.6
10.1
11 13
8.9
1412 15 16 17 2018
9.0 8.9 9.1
10.7
12.1
11.2 20.7
15.714.7
6.0
6.8
22.5
17
6.3
2016
15.7
2018
22.0
+4.2%
Year ending:
Households
exited to
permanent
housing
Households not
permanently
housed
Measured on: Jan ‘09 Jan ‘19… … … … … … … ……
Annual change

4. McKinsey & Company 4
1. Based on the HUD AI income thresholds for a one-person household, given that a majority of the homeless population in King County consists of individuals
2. Compared to share of King County population from U.S. Census population estimates, July 1, 2017
30-50% AMI
2%
Demographics of households experiencing homelessness in 2018
$24.9 –
$41.5K
17%9%
3%
FamiliesVeterans
People over 65 Unaccompanied
youth under age 25
13%
59%
Key interest groups
Share of people in annual
income brackets1
About 22,500
households were homeless for
at least some of 2018
30% of households
experiencing homelessness
were chronically homeless
Homeless
General population
Race &
ethnicity
%, 2018
48
27
15
3
3
3
16
60
6
10
1
17
1
6
Black or
African American
Asian
White
Hispanic or Latino
American Indian
or Alaska Native
Native Hawaiian
or Pacific Islander
Multiple Races
Homeless population relative
to general population2
98%
50-80% AMI
<1%
$41.5K –
$66.2K
$0 –
$24.9K
98%
More than 22,000 households experience homelessness
in Seattle each year
Key group
Sources: HMIS / All Home, American Community Survey
Single adults
under age 25
0-30%
AMI
Preliminary

5. McKinsey & Company 5
Seattle’s economy, population and incomes have grown quickly
1. Washington State Office of Financial Management population estimates for April 1 of each year
2. HUD calculated median incomes for a four-person family in King County
Source: BEA, HUD, Washington State Office of Financial Management
Growth is among the highest of any large US city… …with rapid increases in income
GDP growth 2017-2018 for 25 largest MSAs, % King County population1, 000s
King County area median income2, $000s
10.8
8.6
7.7
7.0
6.8
6.3
6.2
6.0
5.7
5.6
5.3
5.2
5.1
5.1
4.9
4.9
4.5
4.5
4.4
4.0
Dallas-Fort Worth-Arlington, TX
San Jose-Sunnyvale-Santa Clara, CA
Seattle-Tacoma-Bellevue, WA
San Francisco-Oakland-Berkeley, CA
San Diego-Chula Vista-Carlsbad, CA
Phoenix-Mesa-Chandler, AZ
Boston-Cambridge-Newton, MA-NH
Houston-The Woodlands-Sugar Land, TX
Denver-Aurora-Lakewood, CO *
Riverside-San Bernardino-Ontario, CA
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
Los Angeles-Long Beach-Anaheim, CA
Minneapolis-St. Paul-Bloomington, MN-WI
Miami-Fort Lauderdale-Pompano Beach, FL
Washington-Arlington-Alexandria, DC-VA-MD-WV *
Baltimore-Columbia-Towson, MD
Chicago-Naperville-Elgin, IL-IN-WI
Atlanta-Sandy Springs-Alpharetta, GA
New York-Newark-Jersey City, NY-NJ-PA
Detroit-Warren-Dearborn, MI
162010
2,226
1,931
181311 12 14 15 17
2,154
2019
+1.6% p.a.
+1.7% p.a.
12 201918
96
2010 11 1613 14 15 17
86
109
+1.7% p.a.
+6.4% p.a.

6. McKinsey & Company 7
1. Puget Sound Regional Council estimates for King County
2. 2. WA State Office of Financial Management population estimates for April 1 of each year
3. September Zillow Rent Index time series data for multifamily, single family, and co-op/condo residences in King County
4. HUD Office of Policy Development and Research annual median income data for King County
15
130%
95%
2010 2017
150%
11 1412 1613
100%
105%
110%
115%
120%
125%
135%
140%
145%
155%
Housing supply2Jobs1 Population2
Population, job, and housing growth in King County
% of 2010 value
Median rents and incomes
% of 2010 value
Jobs and population growing faster than housing Rents growing much faster than incomes
16142010 1511 12
130%
13 2017
95%
100%
105%
110%
115%
145%
120%
125%
135%
140%
150%
155%
Median market rent4
Median Household Income5
+52%
+21%
+12%
+8%
Despite robust growth, the housing supply and average household
incomes have not kept pace with job growth or rent increases
Sources: Puget Sound Regional Council, WA State OFM, HUD PD&R, Zillow Rent Index
+12%

7. McKinsey & Company 8
Rents have grown faster than incomes, exacerbating pressure
on the poorest households
1.% of King County households in each AMI Band using the 2017 HUD Income thresholds for a 4-person household: <30% (<$22,800), 30-50% (<$48,000), 50-80%
(<$76,800), 80-100% (<$96,000), and >100% (>$96,000)
2.Example occupational incomes for King County, US Bureau of Labor Statistics
Sources: American Community Survey, HUD, Housing Choices Background Report, US Census Median Household Income
55%
(479k)
80-100%
<30%
12%
(105k)
13%
(110k)
9% (76k)
>100%
11%
(96k)
2017
50-80%
30-50%
2017 AMI band1
share of total
households
2017 AMI band
income range, $
>96,000
Example occupations in
household of four2
1 software developer
or
2 construction laborers
1 registered nurse
or
2 administrative assistants
>76,800 - <96,600
1 public school teacher
or
2 retail workers
>48,000 - <76,800
1 retail salesperson
or
2 minimum wage earners
>22,800 - <48,000
1 minimum wage earner<22,800
Income spent on rent in King County, %
45
50
40
35
30
0
55
60
2013 15 17 2019
0-30% AMI
households
30-50% AMI
households
50-80% AMI
households
Key group

8. McKinsey & Company 9McKinsey & Company
Low-income households are highly dependent on
market-rate rental units
Housing situations for households in King County, 2017
000s (share of total households)
Most vouchers go to the
poorest households
Most regulated units go
to higher levels of
income (30-80%)
The rate of
homeownership drops
significantly for poorer
households, though is
still significant at the
bottom tier
Overall, a very large
share of low-income
households live in
market rentals
A large share of
low-income people
live in market-rate
rentals
23 (22%)
11 (14%)
50 (46%)60 (54%) 110
31 (30%) 1 (1%)
33 (44%)
50 (47%)
3 (4%)29 (38%)
17 (18%)16 (17%)39 (41%)24 (25%)
105
76
96
Using VouchersIn Regulated UnitsMarket Rate RentalHome owners
Income
category
0-30% AMI2
30-50% AMI
80-100% AMI
50-80% AMI
1. Includes LIHTC and public housing, MHA, and MFTE units
2. Includes permanent supportive housing
3. Does not include >100% AMI population category
Sources: HUD, WSHFC, American Community Survey

9. McKinsey & Company 10
154
(43%)
17
81
(23%) 46
(13%)
28
(8%)
12
82
(23%)
85
(22%)
139
(39%)
24
(6%)
64
(18%)
105
(29%)
72
(20%)
100
(28%)
27
(7%)
13
48
(13%)
57
(16%)
122
(34%)
27
(8%)
341
80
(21%)
98
(26%)
44
(11%)
134
(35%) 116
(29%)
25
(7%)
122
(34%)
151
(44%)
16
90
(23%)
120
(31%)
39
(11%)
357
35
(9%)
136
(34%)
28
(8%)
18
(5%)
24
(6%)
182
381
97
(24%)
92
(27%)
52
(15%)
151
(37%)
350
123
(32%)
152010
112
(28%)
<30%
(<$720) 28
(8%)
29
(7%)
26
(7%)
64
(18%)
408
137
(39%)
30-50%
($720-$1,200)
23
(6%)
20192
>100%
(>$2,400)
24
(6%)
50-80%
($1,200-$1,920)
94
(27%)
27
(8%)
14
28
(8%)
11
356 359 360
387
396
65
(18%)
80-100%
($1,920-$2,400)
Since 2010, Seattle has lost 112,000 housing units that households
earning less than 80% of AMI could afford
Supply of rental units in King County by the AMI Tier who can afford them1 (thousands of units)
1. Includes units affordable at the high end of the range and unaffordable at the low end
2. Projection based on 2013-17 CAGR
3. Assumed that >100% AMI rental stock will grow at same rate as households in that income category
4. Maximum monthly affordable rent calculated using the 2017 HUD Income thresholds for a 4-person household
Projected2,3AMI bands and corresponding monthly affordable rent range
112k affordable
units lost since
2010
Source: American Community Survey
24k units affordable to households
with <30% AMI in 2017

10. McKinsey & Company 11
40
100
0
10
20
30
70
60
80
90
50
24
Down-rented
/ vacant units2
6
Total Supply Supply gap
18
37
18
17
Households
receiving vouchers
24
Homeowners
96
Total demand
96
Households renting
55
Affordable Units1
King County had a gap of 37,000 affordable homes for households
earning less than 30% of AMI in 2017
1. A unit where monthly rent plus basic utilities does not exceed 30% of household monthly income
2. A unit available at a lower AMI range rented by a household in a higher AMI tier (e.g., a 0-30% unit rented by a family at 50-80% AMI
3. Households in 0-30% AMI range spending >30% of monthly income on rent
4. Households in 0-30% AMI range spending <30% of monthly income on rent
2017 supply and demand of affordable rental units for households earning 30% or less of the area median income in King County
Number of units, number of households, thousands
Rent-burdened
households3
Households in
affordable units4
Supply (housing stock) Demand (households)
Source: ACS PUMS Data 2016
37k units are required
to stably house all
homeless and rent-
burdened households

11. McKinsey & Company 13
Of the 37,000
rent-burdened
ELI families,
16,000 are
without
permanent
housing
16
37
Lack of permanent
housing
Lack of affordable
housing
Range of
estimate
Sizing the need
Estimates of affordable housing units
needed for 0-30% AMI households
000s of homes
Homelessness is caused largely by a lack of
homes.
Seattle has housing gaps at all levels of
affordability, so vouchers are challenging.
Raising incomes, including the minimum wage,
won’t solve the problem because landlords raise
rents as demand rises
Therefore, the only viable solution is to build more
regulated homes.
The homes needed can range from:
 The number of households currently without
permanent housing (16,000) to
 The number of low-income households now
renting unaffordable market-rate apartments
(which are all unstable)

12. McKinsey & Company 14
Different types of housing will be required to close the gap
1.6 4.9
1.0
6.2
0.3
Diversion 0-30
family
1.6
Incremental
vouchers
PSH
individual
0-30
individual
PSH
family
~16
22.9
4.6
6.2 ~37
Certain programs that use
existing stock can be
expanded
Households earning less
than 30% of AMI who do
not have chronic needs
Households earning less
than 30% of AMI who do
have chronic needs
Types of homes required
000s of homes
To address lack of
affordable housing
To address lack of
permanent housing

13. McKinsey & Company 15
Closing this gap would require an increase of 3-5 times current non-
federal spending
128
262
134
Seattle1 King County1 Total neededCurrent total1 Addressing
lack of
permanent
housing
Addressing
lack of
affordable
housing
~700-1400
~450
~1,100
1. Excludes federal funding for affordable housing of about $400 million per year, through LIHTC tax credits and Housing Authority subsidies
Annual spending required over next 10 years
$ Millions
Assumptions
This conservative estimate is
based on several assumptions:
 No increase in services spend
 No inflation in capex or opex
per unit
 No increased need for
affordable housing – that rents
do not rise faster than median
incomes

14. Annual spend, $ millions
70 134
169
153
392
Federally funded1
128
Seattle and King County
2019 homelessness
budgets2
262
The necessary investments are large compared to current
homelessness spending but in line with other public works
1. Current budgets provided by Seattle and King County Housing Authorities. LIHTC estimate based on 2018 awards of 9% tax credits for King County
2. 2019 budgets for homelessness provided by City of Seattle and King County (Note: Seattle estimate for local spending in 2017 was $196M, as cited in McKinsey’s
previous report. Difference is a combination of increases in spending and potential difference in definition.)
3. Sound Transit Annual Report 2018-2023 (https://www.soundtransit.org/sites/default/files/Draft-TDP-2018-2023-and-2017-Annual-Report.pdf)
4. Port of Seattle 2019 Budget Reading & Final Adoption (https://meetings.portseattle.org/portmeetings/attachments/2018/2018_11_27_RM_8c_supp.pdf)
Current spending on homelessness and
ELI housing
1,181
447
Low estimate High estimate
1,950
1,001
Sound Transit 2017-2023
Capital Plan (avg per year)3
Port of Seattle 2019 Capital
budget4
Needed incremental spending on ELI
housing per year for the next 10 years Examples of other regional priorities
King County
Seattle
LIHTC
Approximate current spending: $655 million

15. 17McKinsey & CompanyMcKinsey & Company
Society already incurs $24,ooo per year in direct, indirect
and opportunity costs for each homeless household
Sources: King County HMIS and 2019 PIT Count, 2017-2018 City/ County Homelessness Budget, Santa Clara “Home Not
Found.” detailed sources and assumptions in backup
Indirect3 Opportunity costDirect1
$ per
household2
$ per
household2
$ per
household2
Shelter
Emergency
1,720
1,458
262Transitional
Other services 964
Tourism5Healthcare
Local business6Law enforcement
& criminal justice
Education7Social services
Poverty trap8
1,756
2,539
207
2,534Public services4
8,191
5,146
1,123
142
$7,035 per household
opportunity costs
$14,602 per household in
indirect cost to society
$2,684 per household in
direct supports
About
$24,300
per year per
household incurred
on homelessness
About
$17,000
per year cost to
provide housing