This is part of a series about improving mental health research, diagnosis and treatment. Join the conversation on Twitter with the hashtag #OpenMinds

The ground-floor apartment isn't fancy. There's a beige couch against a beige wall; the drawn curtains hold the shadows in. But Renee Blais chose the mismatched furniture herself and the new curtain rod was hung by a father she'd hardly seen for years. Now she has clean dishes piled by the sink, cookbooks on a table in the living room, a foot-high rubber plant growing in a clay pot. "I'm allowed to have a pet," she says with a grin that reveals two missing teeth. "But I think I will start with a plant."

These small things matter: opening the fridge and seeing food she bought for herself. Making coffee in the morning. A front door with a lock. Before Blais, 28, moved in this winter, she was homeless, prostituting herself for drugs, her every possession stuffed in a bag. She fell asleep knowing her shoes might be stolen by morning – or worse.

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"At the end, I didn't want to live any more," she says. On the street, "you are surrounded by people, but it's the loneliest feeling ever."

Now, she says brightly, "I am not using, I am not lost and all over the place. Since I moved in, only good things have been happening."

Renee didn't find a home; this home found her. Or more precisely, Jason Platts found her, casually showing up on the streets of the low-income Ottawa neighbourhood of Vanier, inviting her for coffee, visiting her in hospital when she was diagnosed with a bacterial infection. It's Platts's job, as an outreach worker for the Canadian Mental Health Association, to wait for her to say she'd had enough of life on the street, and then help her leave it – in this case, by finding an apartment in the city's east end and giving her the support she needs to stay there.

Mental illness and poverty

In many cases, mental illness can't be simplified down to a medical problem that even a perfect health-care system would solve. It's also a social issue, tangled up in poverty, unemployment and family circumstance. People who are poor are about four times as likely to have a mental-health problem, and people who are mentally ill are more likely to become poor. Among the 200,000 people in Canada homeless every year, two-thirds have a history of mental illness or substance abuse. The country spends $7.7-billion for health care, social-service use and the justice system in connection with homelessness; the human cost of being trapped on the street in one of the wealthiest nations in the world is without measure.

This reality is more evidence for early intervention, for publicly funded comprehensive treatments – to tackle illness before it derails a patient's life, and to invest in preventing relapse. But it also means that psychotherapy and well-managed drugs are only a partial remedy for many of the sickest patients who also need support finding jobs and affordable housing.

The support part is proving, in research, to be an essential ingredient – to keep people in their new apartments by bringing the social system to them and not requiring complete sobriety to enter or stay in the program. Housing first, as advocates like to say, but not housing only. This approach, credited to a Canadian psychologist, is now considered to be the best practice mental-health program to end homelessness. And it is being adopted all over the world, thanks, in part, to an unprecendented five-year study in Canadian cities that showed how well it worked.

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Using the Housing First model, which has been endorsed by the Obama administration, cities such as New Orleans and the entire state of Utah are on the verge of declaring an end to chronic homelessness (in the United States, the first focus of the program is often on veterans). Medicine Hat claims it will have achieved this goal by the end of the year. Projects are launching in Europe's largest cities. In 2013, Ottawa committed nearly $600-million over five years to Housing First projects (slightly less than the previous half-decade commitment), with provinces also contributing. The selling point was the five-city pilot project conducted by the Mental Health Commission of Canada, which found that spending $1 on Housing First saved $2 in costs for homeless people with the highest needs and the most severe mental illness. What's more, they were no longer trapped in a hospital bed until they had somewhere to go, or sleeping in a parking garage or locked up in a jail cell, drifting between social supports and treatment plans. They were home.

Genesis of a new approach

Dr. Sam Tsemberis understands the transforming power of place, how the story of a life can be changed with a new country, a different set of walls. He was 7 when his family arrived in Canada, escaping the civil war in Greece for Montreal, where his family ran a deli. As a young substitute teacher tossed into a special-education class, he watched his students hide with shame in their classroom, always wanting the door closed and yet shine on stage in drama club. He went back to school to become a better teacher and became a psychologist instead, which led him to New York and an internship at Bellevue psychiatric hospital. He would counsel people during the day and walk by them the next morning on the sidewalk, still wearing their Bellevue pyjamas.

"The way I learned to help people is to listen to their stories," says Tsemberis, sitting in an Ottawa restaurant in April, having just finished a two-day meeting with social-services groups in the capital. (Tsemberis, who heads the non-profit Pathways to Housing , is based in New York but travels the world giving workshops on the housing first model.)

He recalls how, at Bellevue, he became closer to the patients than the staff, who carried their ward keys like shields of distinction. "I don't think I would have gotten to the idea of putting people into their apartments if I hadn't listened to what people really wanted."

What they wanted was their own place. "You can visit me," they told Tsemberis, "but I don't want to have to hide my beer under the couch when you come over."

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It's so obvious in its simplicity: To help people who are homeless, find them housing. But historically, the philosophy had been very different: People living on the street, struggling with mental illness and drug addiction, had to be helped before they could live independently. They needed to take their meds and give up their alcohol; they needed to learn, once again, to follow society's rules as set by transition houses and shelters. Those programs worked to a certain extent – people were given access to health services, they worked at their addictions, they moved on. But the hardest cases, the sickest people, rarely made it off the street – at least, not for long. "They were programmed into helplessness," Tsemberis says. "When they are invited to go live on their own, there is fear of leaving."

Renee Blais, smart, articulate and now motivated to change her life, is an example of why that approach doesn't work. She'd been homeless for four years when she met Jason Platts. Before that, after five years on the street, she was admitted to a seven-month rehab program in Montreal, but, returning to Ottawa and her old environment, she couldn't avoid drugs. Even the best shelters are rough, filled with other addicts. "For me to stay clean in that place, it would be impossible. For me it wasn't safe." And she didn't always agree with the rules. At a transition house, after leaving a hospital, she argued with the staff and was kicked out one morning for getting too close with a male resident, with whom she is still in a relationship.

Other groups, including a program called Houselink in Toronto, had been moving the homeless into independent housing for decades. But Tsemberis envisioned a more structured plan: Move people into subsidized apartments scattered around the city so they could live like regular tenants, with no restrictions linked to sobriety or treatment compliance, visit them regularly and provide the level of assistance they wanted and needed. It's a social-behavioural approach, rather than a medical-biological one. The housing came first, the help came to them.

In 1992, Tsemberis started out with a team that included a formerly homeless poet and a recovering addict, and enough funding for 50 units. On one of the first nights, one man dragged the furniture out of another apartment and sold it on the street to make money for crack for the addicted tenant living there. The man had been a plumber, so this included the sink and toilet. "That was the beginning of realizing that this is going to be very complicated," Tsemberis recalls. "People will give you many, many opportunities to get rid of them." The plumber was given another apartment, and another; he went to jail and when he got out, he was given yet another. Four apartments later, he was going with Tsemberis to presentations to sell the program to policy-makers.

"If we'd had a 50-per-cent retention rate, we would have been thrilled," Tsemberis recalls. "That first year, we had 84 per cent. We were on to something."

In studies, Housing First has managed to maintain those stats, although it frays a bit over time. In Canadian research, the cost benefits are highest for people with the most severe mental illness, who have the most room to improve. Unlike in the U.S., Canadian research has found that treatment in the community leads to similar health gains for more average clients – a finding experts attribute to universal health care. But in the Mental Health Commission's pilot project, Housing First participants reported better quality of life and 73 per cent were in stable housing after a year, versus 32 per cent of those receiving regular services. Housing First has clashed with groups that provide transitional housing, who have seen their budgets cut, and poverty advocates who point out that a collection of options needs to exist. But as Vicky Stergiopoulos, a psychiatrist at the Centre for Research on Inner City Health at St. Michael's Hospital in Toronto observes, the Housing First model rescues even her most ill patients, the ones with schizophrenia who could never function in shared living space. For her, turf wars are a distraction; this is about what works.

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'Things are getting better every day'

In Medicine Hat, Mayor Ted Clugston was a skeptic when first approached about Housing First. "I was raised that you work hard, you get a job, or two jobs if that's what it takes, and you shouldn't be looking for a handout," he said. People living on the street were lazy, he believed, and needed to get off drugs. The Alberta city's social-service workers, he admits, "had a hard time with me." But eventually, they sold him on the savings it would mean for more expensive city services – and he came to recognize the more complex link between homelessness, stigma and mental illness. In the past five years, the Medicine Hat Community Housing Society has received about $12-million in provincial and federal funds, used to house and support nearly 900 people, including 250 children, in a combination of existing subsidized apartments and newly constructed affordable housing. In a city with a population 61,000, Clugston likes to say that's about the same as Calgary getting 20,000 people off the street. It has not been officially announced but he says Medicine Hat has already achieved its goal of finding housing for every newly homeless person within 10 days.

Not every Housing First strategy looks the same. Tsemberis believes what works best is scattering clients throughout cities in safe neighbourhoods and moving mental-health services out of offices and into their homes directly with personal visits. But some cities have purchased entire buildings, or provide different levels of service – in those cases retention rates are not as high. Some people eventually become self-sufficient, but others stay in the program indefinitely, which means funding needs to be stable. Housing First has focused on single people who are chronically homeless and need mental-health services.

Blais, meanwhile, is making plans. She would like to go back to high school, and do some volunteering. For the first time in years, she spent Easter with her family. She has gone from seeing Platts four times a week to only once. She goes daily for a dose of methadone. "I am sure the time will come when I will be okay on my own," she says. "Things are getting better every day. Now it is time to turn the page."

After lunch, Sam Tsemberis heads back to his Ottawa hotel, walking along Sussex Drive, a street of high-end stores and restaurants. The turrets of the Château Laurier soar into the sky. A few blocks away, the city's shelters are preparing for their nightly guests. Tsemberis catches the eye of an older man sitting on the sidewalk, his wiry, grey beard resting on his chest, his cap out for coins. Tsemberis greets him and gives him change from his pocket. Turning away, he sighs. "That's how we got homelessness. We got used to walking by people on the streets."

And by not listening when they told us what they needed.

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By the numbers

200,000: The number of people in Canada who are homeless annually.

$7-billion: The annual cost of homelessness in Canada in health care, justice costs and social-service use.

67: The percentage of people who are homeless with a history of mental illness.

$600-million: Ottawa's five-year investment in Housing First projects starting in 2014.

55: The percentage of homeless people who had visited an emergency room or been hospitalized in the past year (2010 Health and Housing in Transition Study).

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43: The percentage of long-term psychiatric patients in hospital for 90 days or more, receiving alternative levels of care, who were readmitted within 30 days.

$2,500: The additional cost of a hospital stay for a homeless person compared with an average patient (2011 study at St. Michael's Hospital).

4.8: The average number of years, in their lifetime, that a participant in the Housing First trial had been homeless.

40: The percentage of participants in the trial who reported having their first episode of homelessness before age 25.

73: The percentage of time Housing First participants spent in stable housing over two years.

32: The percentage of time spent in stable housing by a control group.

$19,582: The annual cost of the Housing First initiative for the most severely mentally ill clients with the highest needs.

$42,536: The annual costs saved in services that otherwise would have been used.

225,000: The annual cost to the system, per person, for homeless people who are the highest users of social, justice and health-care services.

$2: The amount saved through Housing First for every $1 spent on these clients.

Sources: Cross-Site at Home/Chez Soi study, Mental Health Commission of Canada; St Michael's Hospital, and 2010 Canadian Health and Housing in Transition Study

The Centre for Addiction and Mental Health has purchased advertisements to accompany this series. The organization had no involvement in the creation or production of this or any other story in the series.