OAKLAND — For almost two years, Colette Walker has lived in the San Pablo Avenue Corridor, a gritty stretch of gas stations, warehouses, mom-and-pop shops and vacant lots between downtown Oakland and Emeryville.

But she’s luckier than many other low-income Oakland residents who cannot afford housing in the country’s fourth most expensive rental market. Walker, an epileptic who is on disability and had taken to sleeping on relatives’ couches — resides in one of 137 subsidized housing units in the historic California Hotel.

It’s more than just a roof over her head. The restored hotel is regularly visited by social workers, nurse practitioners, occupational therapists and other medical professionals who help residents with everything from daily living skills to coping with mental and physical health problems.

Walker is benefiting from a housing model that has gained traction around the Bay Area as cities and counties grapple with the persistent plague of homelessness. First, the homeless are housed in studio apartments, as opposed to shelters. Then the residents are supported with on-site medical and social services to help them heal.

It’s not just about altruism, policy makers say — it makes financial sense too.

Simply put: It’s a lot cheaper to house the homeless than care for them on a revolving-door basis in local hospitals and jails.

A report done last year for a Santa Clara County homeless housing program, for example, found that the public costs for each of 103 persistently homeless people amounted to an average of $62,000 annually. That figure dropped to less than $20,000 after they were placed in housing.

Like many other affordable housing developments in Oakland, the landmark California Hotel, renovated for $43 million by the East Bay Asian Local Development Corporation, features a community garden. In this case, run by People’s Grocery and yielding such edibles as collard greens, honey and even fresh-laid eggs that Walker uses to supplement her diet.

“I try to eat right so I can live longer,” said Walker, holding up a handful of leafy greens. “I’d like to live long enough to see my grandchildren grow up.”

More than a decade ago, San Francisco led the charge in the Bay Area to provide “permanent supportive housing.” Oakland followed suit with dozens of such projects.

The South Bay is trying to keep up despite a particular shortfall of older, single-room occupancy hotels that are still plentiful in San Francisco and Oakland, where they are renovated for the homeless. Yet in San Jose, such hotels were seen as blight and torn down during the redevelopment boom.

“You don’t see a lot of California Hotels,” said Leslye Corsiglia, San Jose’s former housing director, who is now leading SV@Home, a nonprofit tackling the housing crisis in Silicon Valley.

But that’s changing. Last month, the San Jose City Council agreed to pay $2.2 million to purchase and renovate the downtown’s aging Plaza Hotel. The funds will provide interim only living spaces and social services for 49 homeless people.

The council also recently approved a loan of $8.6 million to a nonprofit that will buy and operate a motel on The Alameda to house 56 homeless and formerly homeless people, about half of them permanently. Santa Clara County supervisors last year agreed to spend more than $9 million to buy and renovate hotels and motels to provide temporary and long-term housing with supportive services.

Still, homeless-housing experts who support the model acknowledge that there are downsides.

While it’s true that hotels — as well as apartment buildings — provide a way to move the greatest numbers of homeless off the streets, “you are in some ways creating an isolated community,” said Dr. Robert Ratner, housing services director with Alameda County Behavioral Health Care Services.

“If you’re struggling with addiction, one of the issues is exposure to other people living in the same building with the same problems — that can get in the way of people’s health,” Ratner said.

It also doesn’t help that homeless housing projects, like the California Hotel and San Jose’s Plaza Hotel, are often located in high-crime areas.

Yet Ratner and other experts say any housing is better than no housing when it comes to improving the health of people with complicated medical conditions who are living on the streets.

Like Ratner across the bay, Dr. Joshua Bamberger, San Francisco’s medical director for housing and urban health, said the quality of housing has a stronger impact on health for people living with substance abuse.

Homeless who live in mixed-income housing and newer housing have better health outcomes than those living in single-room occupancy hotels alongside a concentration of other homeless, Bamberger said. He pointed to the success in places like Salt Lake City that have built attractive new housing for the homeless — and managed to cut their homeless population substantially.

Corsiglia called Utah’s project admirable. But, she said, it’s an unfair comparison because of each area’s cost of living.

“There’s not a lot of available land here, and what land we have is expensive, and construction is expensive,” said Corsiglia.

Still, she and other South Bay housing advocates for the homeless, including Ky Le at Santa Clara County’s Office of Supportive Housing, noted several new affordable housing projects are in the pipeline that will provide almost 600 permanent supportive housing units for the homeless in the county.

Meanwhile, renovated hotels are just fine with people like Oakland’s Walker, who knows she’s lucky to have her own place.

“The elderly and the mothers with their kids, they shouldn’t be there,” she said of those living on the streets. “I wish it wasn’t so.”

Contact Tracy Seipel at 408-920-5343. Follow her at Twitter.com/taseipel.