Two years ago, the consulting firm McKinsey & Company delivered a controversial report to King County, Washington. It called for spending a quarter of a billion dollars a year for ten years to address the region’s affordability crisis.
In 2020, McKinsey is back in the news with an updated report that prices the plan at one billion dollars annually.
The reason for the update? McKinsey’s revised plan goes beyond the cost to maintain the current level of homelessness in the region.
They evaluated what it would cost to build housing not just to maintain current levels of homelessness, but to prevent homelessness from happening in the future. They looked at the deepening crisis for those at risk of becoming homeless, and calculated the cost of preventing this homelessness by building housing that was affordable.
The number of houses needed is quite staggering.
A nod to McKinsey, which did not charge for either study in the spirit of tackling King Country’s housing crisis.
An even bigger nod to King County for uncovering the true extent of low income housing need, rather than the more popular fudge intermingled with all kinds of middle class ‘affordability’ definitions, supported by self-congratulatory explanations that trumpet how public private partnerships will solve the problem.
More such hard-nosed reality reports from other regions are needed that identify the scope of a national problem. That’s because no funding scheme, whether city, county, state, or federal, currently offers a way of tackling such a huge affordable housing backlog.
Tax Credit schemes, tax relief schemes and other free market incentives (there are many) all attach handfuls of truly affordable housing to large market rate and middle class housing projects, all of them at the mercy of private enterprise interests. No interest? No build. And if built, completely inadequate numbers of truly affordable homes.
As for woefully underfunded housing voucher schemes (e.g. Housing Choice a.k.a. Section 8), they ultimately spend tax dollars propping up the free market, not building housing.1
Bottom line: it may well be that King County, and other jurisdictions, can build large numbers of long-term affordable housing through a scheme that has demonstrated its ability — public housing. The success of public housing in many other countries suggests that history could repeat itself effectively in the US, if only governments would put their mind to building and managing it for the long term.
Read more about King County’s recent report in the Seattle Times: Make That $1B: New Report Ups The Price To Fix King County’s Affordable-Housing Crisis
Footnotes
- There are some exceptions, including Pittsburg, PA, which is writing off vouchers as ineffective and funneling voucher money towards low income housing. Try: Pittsburgh Plays God With Poor Folks. Feds and State Leave Them No Choice.
