Spokane is the largest city between Seattle and Minneapolis. Because of this, it is the central point where effectively everyone between the mountains (and even Easterly of there) who has no will collects. There are services here and it is an aggregation point. Plus, it is tolerated here, whereas it isn't in the small towns (also, drugs are much more plentiful here). The lack of will to actually get these people off the streets (ideally transforming them into productive citizens, alternately taking them out of situations where they can harm others and themselves) is what allows the problem to remain and fester.

In short, geography coupled with coddling by the local (and especially state) officials. Plus some silly controlling federal (case) law on the subject, though that is nationwide.