“I’m all right here. It’s peaceful.” Betty Wright grips my hand and stares into my eyes. Her voice quavers with earnestness. “It’s like a touch of heaven,” she says. “I finally have a place to rest.” After a lifetime of indigence and itinerancy, Wright moved into Hope Gardens last August. She plans to stay at this haven for the homeless until she dies.

Established by the nonprofit Union Rescue Mission, Hope Gardens is a 78-acre center for the homeless, secluded in a rural canyon near the city of Sylmar. It has been slowly phasing in elderly women as permanent residents for almost a year, and last month single-mother families began moving in on a transitional basis, allowing them to participate in rehabilitative programs for up to three years.

“The main goal,” says Andy Bales, chief executive of the Mission, “is to help people educate themselves, find jobs, and re-enter society as productive citizens.” A staff of case workers, counselors, and teachers will help the women to care for their children and recover from life on the streets. “We’re looking for moms who are ready, willing, and able to make a positive change in their lives,” says Scott Chamberlain, director of the Gardens. At full capacity, the center will house approximately 275 people, transferred from shelters around L.A. County.

During a tour of the facilities with Chamberlain and Bales, they proudly show me the manicured lawns and immaculate apartments of this converted retirement home. Laughing children ride bicycles along flower-lined pathways as smiling mothers chat together in the shade. Residents speak about their struggles to maintain dignity while raising their children on the streets. “Almost everywhere, they treat you like crap,” explains Olga Koleshchuk. “When your kid has a bloody nose from dehydration, if you’re hungry and don’t have a place to sleep, it’s hard not to give up,” adds Veronica Duran-Ramirez.

Estimates of L.A. County’s homeless population range between 90,000 and 200,000 on any given night. “Homelessness here is absurd,” Bales says. “It’s a disgrace.”

His assessment is commonplace among the county’s service providers and homeless advocates, though reform efforts remain frustrated by scarce funding and a lack of political will. “There are so many coalitions, so many organizations,” explains Michael Cousineau, associate professor at the USC School of Policy, Planning, and Development. “But without a government plan to address the issues systematically, there’s little hope for widespread or sustainable change.”

Bales is optimistic that Hope Gardens can help to catalyze a “cultural shift” in the public’s perception of homelessness. “We need a broad political consensus,” he says, “and to achieve that, we ultimately need people to stop ignoring the problems of homelessness.” He is eager to present the Gardens as a model for a new approach. “Per capita, it’s actually cheaper to set up a system like this than it is to run the programs in Skid Row,” he says.

The comparison to Skid Row is not accidental. Media stories and images of the women in Hope Gardens have become a powerful argument for what many local politicians, business associations, and development commissions, as well as the editorial board of the L.A. Times, have taken to calling the “decentralization of services” from downtown L.A.

State Senator Gilbert Cedillo (D-Los Angeles) is currently pushing a “Fair Share Zoning Bill” (SB 2), which would require cities to assess their need for homeless services, and then zone areas where those services could be provided by non-governmental organizations. Only 26 of the 87 cities in L.A. County currently have such areas zoned.

“This has been going on far too long,” says L.A. City Councilmember Jan Perry. “Cities need to start taking on their own responsibilities.” Hope Gardens, she says, “is a perfect example of how this can be done.”

Historically, one major obstacle to setting up centers like Hope Gardens has been resistance from local communities, in the form of so-called NIMBY campaigns. It took the Mission more than five years just to find a site for the Gardens, and, even after winning the $7.38 million bid, the organization had to negotiate 34 government hearings over 21 months, which cost an additional $1.9 million in interest payments and legal fees. Few groups have the resources to overcome such barriers.

As families phase in to residency at the Gardens, however, NIMBY concerns seem to have dissipated. “They came at the beginning to check us out,” explains shelter resident Ethel Brooks. “I guess they realized we’re not monsters or something … we haven’t had any problems after that.” Bales hopes this is a sign that neighborhood resistance can be overcome, and that SB 2 can pave the way for a radical change in how L.A. County treats its homeless population.

However, because cities would be asked to carry out their own needs assessments, and would suffer no consequences for neglecting to do so, the potential effects of the legislation remain unclear. Becky Dennison, codirector of advocacy group the Los Angeles Community Action, makes a distinction between “decentralization” – which she fears may be used “as a rhetorical cover for the evisceration of services” – and “regionalization, which would add new services for the homeless at their communities of origin, without altering the services available in Skid Row.”

The controversy over decentralization closely mirrors other contentious aspects of downtown’s transformation, such as the Safer Cities Initiative (SCI), which has led to greatly intensified police pressure on Skid Row. SCI is closely modeled on the so-called “broken windows campaign” that L.A. Police Chief William J. Bratton conducted to successfully “clean up” Times Square when he was police chief in New York City. His efforts there, however, were accompanied by $1.7 billion in funding for the construction of new low-income housing units – an aspect of the New York campaign that SCI has yet to replicate.

“There’s been a kind of schizophrenia in city policy,” observes Jeff Dietrich, who for more than 20 years has worked as a service provider and journalist on Skid Row. “Mostly what we’ve seen is a drastic increase in arrests and harassment.”

Law enforcement officials consider their increased presence beneficial to the Skid Row community. “We’re arresting the criminals that are victimizing the poor,” says Capt. Jodi Wakefield, area commander of the Central Division. “Crime has gone down 33 percent in Skid Row,” affirms Deon Joseph, Senior Lead Officer for downtown. “It used to be a Mardi Gras for criminals here.”

Whatever the immediate effects of SCI policies, however, the long-term results will be tied to the future of decentralization plans. “People will go wherever the services are,” notes Councilmember Perry.

“What we really need is microsystems of care,” says USC’s Professor Cousineau. The example of Hope Gardens is encouraging, he says, but “we need services that can address the needs of the mentally ill, issues of substance abuse – we need the diversity of services available in Skid Row to be replicated throughout the county.”

“It’s simply too early to tell what’s going to happen,” Bales says. “But unless we can get some real unified political support,” he adds, “you can pretty much bet that things aren’t going to improve.”

AT THE LATIN ACADEMY, a majestic former school built in 1900 near Dorchester's Codman Square, Joe Jeannotte is participating in a social experiment.

Jeannotte lives in a sparsely furnished new two-bedroom apartment. Light streams through large windows, and a burgundy and forest green couch faces a small television. He looks older than his 38 years -- gaunt, scruffy, with dark brown hair -- and shares the place with his girlfriend, Judy, who asked that her last name not be used. Often, the noise of construction filters in as workers rehab other apartments, but the couple doesn't complain. Not long ago, they were convinced they would never have a place to live at all. When they moved into the new place, at public expense, they had no home and no money, and both had been struggling for years with heroin addiction.

In the past, society's approach to homeless people with chronic health problems such as addiction has been governed by tough love: Stay in treatment, or you don't get the opportunity for publicly supported housing. People who could not confront their addiction, the thinking went, could not handle an apartment.

But a new approach, called "housing first," is gathering momentum. The idea is to target the most difficult cases -- the chronically homeless who make up between 10 and 20 percent of the homeless population and spend years cycling between the streets, shelters, jail cells, and emergency rooms -- and give them apartments without requiring them to get sober, in the hope that having a place to live will help them address their other problems. More than 150 cities or counties around the country already have programs of some kind or plans to initiate one, and last month the Massachusetts Senate Ways and Means Committee recommended doubling the size of a small pilot program in the state. If the pilot succeeds, proponents say it could force dramatic changes in homeless policy -- and a recognition that the current shelter system, built on what they call a punitive moralism, has fundamentally failed.

"Shelters have become the poor houses of the 21st century," said Joe Finn, executive director of the Massachusetts Housing and Shelter Alliance (MHSA), who is administering Home and Healthy for Good, the pilot program.

The program's appeal reaches across the ideological landscape. In 1999, a Republican Congress endorsed the concept, requiring that the US Department of Housing and Urban Development devote at least a third of its homelessness funding toward putting the chronically homeless and chronically disabled in permanent housing. Cities like San Francisco, Atlanta, and Portland, Oregon, have become proponents after successful tests. The Bush administration has also been enthusiastic. In 2002, it hired Philip Mangano, who spent 25 years in Boston as a homeless advocate, to head its homelessness efforts, and he has evangelized widely for the housing-first approach.

Part of the program's broad appeal is its counterintuitive claim: That it can often break even or save money while providing housing. Academic studies, based on programs in New York City and Philadelphia, have found that cities spend almost the same or less money on the housing and other services than they would on shelter beds, emergency rooms, and other health care costs.

"Cost-benefit analysis may be the new compassion," said Mangano, the founding executive director of MHSA. He's now executive director of the federal Interagency Council on Homelessness.

There are also critics across the political spectrum who are uneasy about what they think amounts to rewarding bad behavior -- putting drug addicts and alcoholics at the front of the line for housing.

Yet the housing-first movement is part of a broader, more ambitious agenda: ending homelessness, not managing it. Many Americans forget that widespread urban homelessness is a recent problem that began in the early '80s, not an inevitable price of capitalism. For years, a great deal of money has been spent managing homelessness in various ad hoc approaches, particularly shelters.

In pushing the housing-first approach to municipal, county, and state governments, Mangano (and, by extension, the Bush administration) is rejecting the idea that chronic homelessness will always be with us. The problem can be solved, they argue, and, eventually, much of the social-services industry built up around it can and must be dismantled.

It is an argument that longtime advocates say brings a mixture of excitement at the possibilities and fears about what it might mean in practice. Nan Roman, president and CEO of the National Alliance to End Homelessness, says some shelter providers have said to her, "If we end homelessness, what are we going to do for a living?"

Many observers credit the birth of the housing-first concept to Sam Tsemberis, who calls himself a "recovering psychologist." While treating homeless people for their mental health or substance abuse problems, Tsemberis, who is based in New York City, recognized that "business as usual" was not working. His patients invariably told him that, before they could work on their other problems, they needed housing first. In 1992, he founded Pathways to Housing to provide mentally ill and substance-abusing homeless people with their own apartments immediately.

During the 1990s, Dennis Culhane, a sociology professor at the University of Pennsylvania, started collecting and analyzing the data on all that spending and its effectiveness. In a series of studies, he revealed, among other things, that the chronically homeless population -- the mentally ill and addicts who were spending years on the street, in and out of shelters -- made up only 10 percent of the homeless population but were using 50 percent of shelter resources. In follow-up studies, he revealed that by focusing on housing this subgroup, communities could better keep down costs and help turn around lives.

A landmark 2002 study by Culhane found that providing housing and other assistance to the homeless could bring down nonhousing expenses almost enough to pay for itself. The study followed mentally ill homeless people between 1989 and 1997 and found that each permanent supported housing unit saved $16,281 a year in public costs for shelter, health care, mental health, and criminal justice, offsetting most of the $17,277 cost of housing and other services.

Mangano, a former seminarian who had focused on housing for the mentally ill in Massachusetts, said he was so impressed by the New York Pathways to Housing program and Culhane's research that he decided to take the ideas and disseminate them nationally.

"We committed an act of legitimate larceny," Mangano said.

Medical bills for today's homeless are a large expense. For example, between 1999 and 2003, the Boston Health Care for the Homeless Program (BHCHP), a group that provides primary care for people living on the streets, tracked the medical expenses of 119 chronically homeless clients. All told, the group racked up 18,342 emergency-room visits, for an average of more than 36 visits per person each year. At a minimum cost of $1000 a visit, that's an annual emergency room bill of ,at least $36,000 per person. Lack of stable housing makes it hard for people to rehabilitate after an illness, properly care for wounds, or take medication consistently, according to Dr. Jim O'Connell, the president of BHCHP who headed the study and is also involved in the Home and Healthy for Good pilot in Massachusetts.

Last year, the state legislature allocated $600,000 for that pilot, which is being tried in locations across Massachusetts. Preliminary data from the program indicates that it is saving the state money, according to MHSA executive director Joe Finn. Home and Healthy for Good has put 155 formerly chronically homeless people into stable housing, paid for their apartments, and assigned them social workers to help them find the services they need. Finn's group concluded that the Commonwealth saved, on average, $918 a month during the fist six months in shelter and service costs (including health care, hospitalizations, emergency room visits, incarcerations, drug detoxification, and shelters) for each person housed. That's a projected annual savings of $11,016 per person. Federal figures suggest that there are at least 3,137 chronically homeless adults in the state.

The savings are impressive, but some worry they may be inflated. Jim Greene, who heads the city of Boston's Emergency Shelter Commission, suspects that some of the success stories from around the country are misleading, worrying that the people who ran the studies were selective about who they enrolled. But the Massachusetts program has specifically asked for the neediest and most challenging street people, according to Dr. Jessie Gaeta, an MHSA Physician Advocacy Fellow and a clinician for the Boston Health Care for the Homeless Program who is one of the study's investigators. Still, she said, she will not consider any of the results to be valid until they have at least a year's worth of data.

Even if the program does save money overall, it still poses a political problem: The agencies that save money on health care, for example, are not the same as those that spend money on housing and other services. That could lead to a budget turf war.

The program could also force changes in the shelter community. Romney appointee Linda Barton Fosburg, executive director of the Massachusetts Interagency Council on Homelessness and Housing, says that some advocates "don't want to see the shelter industry dismantled" because "they don't want to let go of their piece of the pie." Robert V. Hess, commissioner of New York City's Department of Homeless Services, said he has seen "a fair amount of push-back" from shelter providers to the idea of housing-first in New York, as well as in Philaldephia, where he introduced it.

But housing-first advocates say that some shelters can adjust programmatically and financially by becoming providers of transitional and permanent housing. Several homeless shelters in the area, such as Father Bill's Place in Quincy, have already started converting.

Yet even as the Massachusetts pilot has shown promise, critics have begun to express other concerns. One, they say, is that success would distract attention from the 80 to 90 percent of the homeless population who are not chronically homeless. Another is that lawmakers will be too quick to reduce funding for the state's many homeless shelters -- or that they will try to do housing-first on the cheap, which will cause it to fail.

"We don't want to rob Peter to pay Paul," said Lyndia Downie, president of the Pine Street Inn. The state is in dire need, she said, of a comprehensive plan to address homelessness.

Last October, the legislature created a commission to be co-chaired by Rep. Byron Rushing and Tina Brooks, Governor Deval Patrick's Undersecretary for Department of Housing and Community Development, to do just that. But Patrick, who has said he is committed to ending homelessness in Massachusetts, has not yet appointed any members.

Another open question is how much housing-first helps the homeless with their underlying problems. But advocates say that this is a very high bar; addiction, for example, is a notoriously difficult problem, and even modest goals make the idea worthwhile.

"If you measure success as complete abstinence, success rates are very low," said Culhane. "Many people relapse." But "in the public health field, there is a countervailing view, sometimes characterized as harm-reduction." In this view, minimizing harm -- as in the case of clean-needles programs to reduce the spread of HIV -- is every bit as important.

Joe and Judy, the couple who recently moved into the Dorchester two-bedroom, met five years ago at the Long Island Shelter in Quincy Bay while handing out blankets. On the street for years, they had both spent their nights bouncing from Boston Common park benches to various shelters and back to hang out on the Common during daylight hours. Now HIV positive from sharing needles, Joe says the simple act of taking his life-saving medications was often thwarted when his small bag of possessions was stolen as he tried to sleep on the streets.

For now, the two appear to be functioning well: They say they have been attending Narcotics Anonymous meetings three times a week, keep the place neat, and cook for themselves. Both say they are clean and want to kick cigarettes next. They say disabilities have kept them from working, but Judy wants to find a job.

"I have a lot more hope," she said.

Florence Graves is founding director of Brandeis University's Schuster Institute for Investigative Journalism. Hadar Sayfan is a senior research assistant at the institute.