Luis Castellanos is still so shocked at having a home all to himself that he sometimes spreads out a blanket on the floor next to his bed and sleeps on it, like he did on the ground at Golden Gate Park for years.

At 56, after a lifetime of poverty-driven agonies, he’s just getting used to the prospect of never being homeless again, and certainly doesn’t consider himself a model for anything, let alone a trailblazer for people like him.

But Castellanos is just that.

He’s the first person to move out of San Francisco’s specialized housing for homeless people into his own apartment through a program called the Moving On Initiative. If the program takes off, Moving On could save the city millions of dollars a year — and go a long way toward clearing away the ragged tent cities that have mushroomed along alleys and sidewalks for years.

So far, so good. Castellanos may not be sleeping every night in his own bed, but he’s staying inside and dutifully paying his bills. In his quiet, one-bedroom place in the Richmond District, he says, he’s never been happier.

“At first I thought it was a joke, like some reality show where they say get your butt out of here when the show is over, but this Moving On thing is for real,” Castellanos said the other day, lounging in his tidy living room with a bowl of fruit and a glass of sparkling water. “I still almost can’t believe it.

“I feel like I am living the American dream for real, at last.”

For more than a decade, one technique has worked best to permanently pull the most crisis-stricken homeless people off the streets and into healthy lives. It’s supportive housing — giving them a place to live with on-site counseling to help them conquer the mental, drug or other scourges that pushed them into abject poverty.

But in San Francisco, there’s not enough of it. About 95 percent of the hard-core homeless people who move into supportive housing don’t move out, according to city records. And with the cost of each new unit reaching as much as $450,000, there’s been a maddening shortage of places for counselors to put more people.

That will change dramatically if Moving On works.

Consider: There are about 6,500 formerly chronically homeless people — that is, the most visible and problematic ones who’ve lived outside for more than a year, afflicted by addiction or other issues — living in supportive housing units in San Francisco. Only about 300 additional units are being created every year, while 2,100 hard-core street denizens were tallied in the city’s last official street count in January. Around 450 more such people flow into the city every year, according to federal calculations. So, with the constant inflow and a crimped ability to create new housing, the chronically homeless population hasn’t dropped significantly in years.

This equation needs a transformation if there is to be any hope of clearing the streets. Moving On could be a huge step forward, by shifting as much as 10 percent of supportive housing residents into independent living each year. That translates to 650 people, more than double the usual number of new supportive housing units created every year.

The technique has already worked to that level of efficiency or better in recent years in a handful of cities, including New York, Atlanta and New Haven, Conn., and reached a turnover rate of as much as 20 percent in some locations, as The Chronicle reported last summer. Experts think it could work here — and city policy leaders are betting it will.

“This is important, because we simply don’t have enough permanent supportive housing to bring everyone in quickly,” said Jeff Kositsky, head of the city’s Department of Homelessness and Supportive Housing. “But we don’t want to just toss people out. We want to make sure they are set up for success.

“The only answer to homelessness can’t be government-supported housing — and it shouldn’t be. Most people just want to see the tents all gone, and this is one of the big ways that is going to happen. This is part of the tip of the spear in our system’s redesign.”

Luis Castellanos’ journey from birth to his placid new life is a definition of improbable.

Born in Mexico to a single mother who died when he was 2, Castellanos was raised by an uncle who forced him to sell candy on the street from the time he could walk and whipped him when he didn’t bring back enough cash. He ran away when he was 10. At 18, he swam across the Rio Grande to Texas in hopes of a better life in America.

From the Lone Star State to the West Coast, he did every grunt job imaginable, from construction to walking advertising flyers door-to-door, at times living under a roof. But struggles with booze and sniffing glue as a young man, along with post-traumatic stress from his abusive childhood, damned him with an occasional hair-trigger temper and depression.

He wound up in San Francisco in the mid-1990s, bouncing back and forth between the streets and stability, working odd jobs, until the late 2000s, when he gave up on being able to afford living indoors. He found a bare spot in a snarl of tree trunks in Golden Gate Park, hidden by thick brush and branches, and made it his year-round camping spot.

“I didn’t bother anyone, I kept out of sight, and nobody ever found me,” he said. “But I really did miss having a real place to live. I never gave up on the idea that maybe someday I could get that.”

Solid hope emerged in early 2014 when city outreach workers got him a spot at the Hamlin Hotel, a model of supportive housing run by the nonprofit Community Housing Partnership. As at the rest of the city’s supportive housing complexes, his room at the Hamlin is a “permanent” home; he could stay there for the rest of his life with his rent paid by federal disability checks and city subsidies.

But supportive housing’s key element — counseling and case management — helped ready Castellanos to take the next step.

Hamlin’s staff connected him with doctors and medication to conquer his post-traumatic stress and the effects of his youthful substance abuse. Inside at last, with no danger of being evicted, he learned how to manage his money and plan for a future without uncertainty.

He became a model resident, counselors say. Two years ago, after intensive study, he became a U.S. citizen, and after three years in supportive housing, he was calm, directed and ready to move on. He knew exactly where he wanted to go — and where he didn’t.

“I did not want to stay in the Tenderloin,” Castellanos said. “Some people like it because they have friends there, or it’s just familiar. For me, the Tenderloin has too many drugs, too many people acting out. I like the quiet.

“All those years I was sleeping in Golden Gate Park, I used to walk through the Richmond (neighborhood) and think, ‘Man, I’d love to live there one day,’” he said. “So when they told me I could find a place of my own, that’s where I asked to go.

“It just seemed perfect for me.”

On March 31, he moved out of the Hamlin and into the Richmond District.

His apartment is two floors up in a neat brick complex on a noiseless side street a few blocks away from his old spot in the park. Brilliant Corners, the nonprofit that runs Moving On, supplied furniture and kitchenware, and provided his deposit and first month’s rent. His main luxury is an acoustic guitar he can play whenever he wants — the hotel’s walls were too thin for that. When he strums classic rock favorites like “Tin Man” by America, his face beams with joy.

Even when he camped under the trees, Castellanos was a bit of a neat freak, and that’s translated into an apartment that practically gleams. His refrigerator holds tidy rows of tortillas, beans, chicken and bowls of cut-up fruit. He hasn’t gone hungry for a few years now, but the whole concept of food is a little more special when it’s well-stocked in your own fridge.

“I told them at Brilliant Corners I don’t deserve this, but they said, ‘No, no, it’s OK,’” Castellanos said. “I guess I’m what you call a street survivor.”

Azizi Gupton, support services supervisor at the Hamlin, said Castellanos was the first one she thought of when she learned last spring that Brilliant Corners was looking for applicants.

“Luis is always up front, honest, open to change, and that was important for making this leap to independence,” she said. “Some people never see who you can be beyond the bad times. Not him.

“We’ve had some other people here who could have fit in well for Moving On, but said, ‘Hey, I’m fine here.’ And others were worried about being able to pay their PG&E and other bills, and they like the food pantry and meals we have here. And that’s fine. It was perfect for Luis, though.”

There one’s main transition Castellanos is still working on, though: sleeping in an actual bed every night.

“I’ve got to sleep down here until I can finally feel like it’s permanent in this place,” Castellanos said one evening as he laid out a clean blanket on his bedroom floor, the latest of his constant string of library books — Maureen Dowd’s “The Year of Voting Dangerously” — at one side ready for presleep reading. “I don’t want to get too comfortable. A little part of me is still waiting until someone says it was all a mistake, go back to where you came from.

“I know that won’t happen, really,” he said with a sheepish grin. “But still. I don’t think it’ll take much longer to get over that.”

Brilliant Corners has been creating supportive housing in both complexes and in individual apartments for a decade in San Francisco, Los Angeles and San Diego. Its managers say it wasn’t much of a stretch to begin finding rentals for the Moving On program.

“Why would landlords rent to someone who had been homeless before, and had credit and rental history issues? You’d be surprised,” said Bill Pickel, the nonprofit’s executive director. “We’ve had no trouble, because the people being referred to us are stable and ready, like Luis.”

The main attraction is that, through a combination of a tenant’s Social Security, disability or other checks and Section 8 housing vouchers, a landlord can count on a steady rent check of between $2,500 and nearly $3,000 a month for small units. Moving On’s staff of a dozen rental specialists and counselors handles all the move-in arrangements, sets up a routine for paying rent, and meets with clients once a week to make sure things are going well.

“It’s really important that we are able to promise the landlord that if there’s a problem we will be there to work it out,” Pickel said.

That came in handy shortly after Castellanos moved in, when his landlord, Curtis Lee, was confused about some of the legal language in the rental arrangement. Castellanos didn’t know how to clear it up, but Moving On sorted it out. A testimonial from Lee now appears in the organization’s materials saying he can “wholeheartedly recommend” the program.

Another landlord, Mike Musleh, said renting to two Moving On participants in the Richmond and the Bayview made him feel “like somehow I hit the jackpot.”

“I’ve had quite a few rental buildings for a long time in San Francisco, and renting to Section 8 people can be a crapshoot,” Musleh said. “If it wasn’t for the case manager at Brilliant Corners I wouldn’t have done it this time. But this is the first agency like this that I’ve dealt with that when you talk to them you feel like you’re talking to people, not an ‘it.’ They came across straight — and they have been straight with me.”

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Having steady, independent renters who don’t miss payments or need to lean on intensive support services saves money for both landlords and the city.

In San Francisco, the concept of vigorously helping people move from street to shelter to supportive housing to independence has actually been championed for a decade by people like Kositsky and Gail Gilman, head of the nonprofit that runs the Hamlin Hotel. Gilman calls it “the housing ladder,” and told The Chronicle last year that she believed San Francisco could free up 10 percent of its supportive housing stock by helping people into independence.

“Not everyone needs 100 percent supportive housing,” she said last fall. “The sooner we move on that the better, and I know that Jeff (Kositsky) understands that.”

A ready case in point: Luis Castellanos’ climb up the housing ladder to his new Richmond District apartment has made room for Harold Haynie to begin his own ascent.

Haynie, 61, got the spot vacated in the Hamlin Hotel by Castellanos. When he moved in during May, he found himself in his first steady home in more than 20 years.

“I lived in shelters for the past two years, looking and looking for a place to live, and I finally got this one,” Haynie said. “I had a stroke in October and just got out of the hospital in December. It’s impossible to find a home around here.

“I don’t know what that program is that helped open up this room for me at the Hamlin, but I am grateful for whatever happened,” he said. “It’s a real roof, my roof. Whoever moved out to make this space — thank you.”

Kevin Fagan is a San Francisco Chronicle staff writer. Email: kfagan@sfchronicle.com Twitter: @KevinChron