"Research conducted at the University of Pennsylvania showed that most single adults coming into shelters exited pretty quickly but that a small group of single adults were chronically homeless. They typically had serious mental illnesses and frequently used public services, such as emergency shelters, emergency rooms and hospitals, and prison or jails. Research showed that this group could be helped with permanent supportive housing, which provides a housing subsidy alongside intensive services to promote housing stability. The clincher? Providing this group with permanent supportive housing could cost almost the same as doing nothing.
This work and other research debunked the “housing readiness” theory—the idea that people have to overcome their personal problems and be ready for housing before leaving shelters. Instead, evidence supported the “housing first” approach. “Housing first” says that most people, even people with mental illness and substance abuse problems, can stay housed with the support of wraparound services. Having a safe, stable place allows people to work on their other problems. You can’t improve your life if you’re living out of a shelter, checking in and out every day, sleeping with bedbugs, having your things stolen, and possibly experiencing sexual or physical violence—those aren’t optimal conditions for finding and keeping a job or stabilizing mental illness. Recent evidence from Seattle shows that people who move from the street into stable housing do improve their lives—for example, they may start drinking less.
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Research clearly shows that affordable housing ends homelessness for people. And we have a real housing need in this country. In 2006, 8.8 million renter households were spending more than half their income on housing. We need to invest more in affordable housing and make some changes in our tax policies to support rental housing. Current policies are heavily geared towards homeowners. If the foreclosure crisis has taught us anything, it’s that not everyone should be a homeowner and that a strong rental policy can be a good thing for the country. Perhaps some of the tax subsidies going to homeowners could be used to build affordable housing because the market doesn’t do it. We need more housing vouchers too. Some are nervous about increasing the housing voucher program, but the program works. Vouchers can help people get stable housing and are typically used for only a few years."
http://www.urban.org/toolkit/fivequestions/MCunningham.cfm