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Manhattan Institute

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Supportive Housing and the Mentally Ill Homeless


Supportive Housing and the Mentally Ill Homeless

September 15, 2016
Urban PolicyHousingWelfare
Health PolicyMental Illness


Supportive housing, which combines subsidized rents with services, has long been central to New York City’s efforts to address homelessness. When the government began building supportive housing on a broad scale in the early 1990s, the principal beneficiaries were individuals suffering from both homelessness and serious mental illness. In recent years the focus has broadened to include other populations, such as those recovering from substance abuse and youths aging out of foster homes. While each of these groups needs assistance, that help should not necessarily be supplied through supportive housing.

Key Findings

  • Supportive housing’s ability to reduce overall homelessness has been shown to be modest. Studies indicate that placing the homeless in supportive housing reduces expenditures on other government services, but the cost savings are truly significant only in the case of the seriously mentally ill.
  • Mayor Bill de Blasio’s $2.6 billion supportive-housing plan is one of his administration’s best ideas for combating homelessness. However, by trying to serve more subpopulations than is feasible, the plan risks failing to accommodate those who need it most.
  • Based on a review of the literature, analysis of city data, and interviews with providers, advocates, and current and former officials, New York would be better served by dedicating two-thirds of the total units from the mayor’s plan to homeless individuals diagnosed with a serious mental illness, such as bipolar depression or schizophrenia. This would leave city government better positioned, over the next two decades, to address untreated mental illness and still leave 5,000 units available to serve other needy populations.



Stephen Eide is a senior fellow at the Manhattan Institute.