Chronic homelessness is defined as long-term or repeated homelessness. Chronically homeless people have a serious physical or mental disability, including mental illnesses like schizophrenia and/or alcohol or drug addiction. For this population, permanent housing linked to intensive services is usually necessary to achieve stability.

Permanent supportive housing has been shown to be not only successful at ending chronic homelessness, but is also often cost-efficient. People experiencing long-term homelessness often incur significant public costs – through emergency room visits, run-ins with law enforcement, incarceration, and access to existing poverty and homeless programs. A number of cost and case studies have demonstrated that permanent supportive housing largely or totally offsets these costs while ending homelessness.

• A study performed by homelessness scholar Dennis Culhane showed that in New York City, each unit of permanent supportive housing saved $16,282 per year in public costs for shelter, health care, mental health, and criminal justice. The savings alone offset nearly all of the $17,277 cost of supportive housing.
• A 2009 Seattle study found that moving chronic inebriates into permanent supportive housing resulted in an approximately 33 percent decline in alcohol use for clients and saved nearly $30,000 per year per person.

The vast majority of people who experience chronic homelessness interact with multiple service systems, providing an opportunity to prevent their homelessness in the first place. Promising prevention strategies focus on people who are leaving hospitals, psychiatric facilities, substance abuse treatment programs, prisons, and jails.