Funded and licensed by the state Department of Mental Health to provide intensive support for individuals with mental illness, this Pine Street Inn facility at 7 Locksley St. in Boston’s Jamaica Plain neighborhood is home to nine tenants and one resident manager. In all, Pine Street Inn, a well-known shelter organization, provides permanent housing for 300 formerly homeless tenants who receive support services and pay one-third of their incomes for rent.

As greater Boston’s housing crisis escalates, homeless shelters are entering the fray as developers of affordable housing targeted to meet the long-term needs of the poorest of the poor.

Little-known to the general public, some homeless shelters such as the Pine Street Inn in Boston have been developing affordable, supportive housing over the past two decades, working to eradicate the very need for their existence. Offering support staff and case-management care seven days a week, such developments are meant to serve those whom the real estate market at large simply does not accommodate. The transition of several such organizations from being simply providers to temporary shelter to developers and operators of transitional and permanent housing solutions is accelerating.

“Homeless shelters are having to become housing developers,” said John Yazwinski, executive director of Father Bill’s Place, an emergency homeless shelter in Quincy.

Father Bill’s serves nearly 1,500 clients every year through its diverse programs and has developed several transitional and permanent affordable housing options for the homeless.

“With a little bit of support and case-management care, [building housing] is very cost-effective and it puts resources back into the shelters,” said Yazwinski. “We’ve seen, on a small scale, that when you put people who are chronically homeless into supportive housing, instead of the warehousing concept, success rates are more than 80 percent.”

For example, in 1997 Father Bill’s purchased one abandoned, fire-damaged building and renovated it into an eight-unit home for veterans with substance abuse problems. The project, Yazwinski said, has been a great success. Last year, the organization developed a six-room home for chronically homeless women with severe mental health issues. Father Bill’s latest project is a 12-unit lodging house for women.

“We’re excited because right now Father Bill’s serves 40 women in an emergency shelter in a school basement,” said Yazwinski. “Why can’t we, in time, create 40 units for women? We can really look at ending this problem for the first time at a local level.”

The Pine Street Inn, which began in 1969 as a men’s shelter, opened its first permanent residence in 1984.

“Back in the early 1980s, it was clear to the staff here at Pine Street that the amount of affordable housing was diminishing rapidly even at that time,” said Shepley Metcalf, Pine Street’s communications director.

Today, Pine Street’s housing, located throughout the city, encompasses more than 300 tenants paying one-third of their income to rent. The organization’s developments are supportive, not just affordable housing – an important distinction. Pine Street manages the houses, with support staff either living there or coming in on a regular basis. Six of Pine Street’s properties are funded through the state Department of Mental Health.

“It’s very challenging finding properties we can afford and then getting neighborhood approval,” said Metcalf. “What usually happens is people visit our other sites, and then they understand what it’s about.”

Pine Street operates three houses in Brookline on Beacon Street, three in Boston’s South End and several in the Boston neighborhoods of Roxbury and Dorchester and the city of Gloucester. Approximately 50 people live in a Jamaica Plain residence, a former girls’ school. The residences feature private rooms but shared living/dining/kitchen areas to provide a sense of community.

‘A Different Way’

Three Pine Street projects are currently in the works. One, an 11-unit construction located on Geneva Avenue in Dorchester, just broke ground in December and should be finished within one year. The project, intended for homeless elders aged 62 and older, has been in the pipeline for five years.

Pine Street is also developing an eight-unit project on Zeigler Street in Roxbury and a nine-unit project on Algonquin Street in Dorchester. These two are being developed for people who are chronically homeless, have mental illnesses and earn 10 percent or less of the area median income.

“We need to put together a financing package that brings resources to a project so it can be extended to low-income people and not have an enormous mortgage on the property because the rental income will be so small. It’s expensive in a market like Boston,” said Jan Griffin, Pine Street’s director of planning.

“We are up against sky-high pricing and the construction costs for renovation are high,” added Griffin. “We’re out in the marketplace with all the other developers. It’s hard for us, and it’s all part of the packaging – we need to put things together in a different way.”

Organizations that serve the homeless are collaborating in their efforts more than ever before, with more partnering between agencies, Griffin noted. Meanwhile, the Massachusetts Housing Shelter Alliance, a statewide alliance of 86 organizations serving the homeless, is lobbying for policy that would give more flexibility in state funding, allowing shelter funds to be used for the special housing projects without losing shelter beds.

“The biggest challenge is bringing together all the financial resources needed to put a project online. There are a limited number of products available, and you have to tie as many as possible together to get capital in place to achieve the project,” MHSA Executive Director Joe Finn said. “You have to apply any number of state and federal funds, with often contradictory regulatory schemes. It’s difficult to try to patch them together and make it work.”

MHSA is examining the success rates of various housing models, and hoping pilot programs can be created throughout the state that incorporate the supportive housing paradigm.

“It’s a complex issue, and there are no easy answers. But I think there are things we can be doing that are better than shelters at this point,” Finn said.

The Southern Middlesex Opportunity Council, or SMOC, has been operating under that idea for nearly 20 years. The organization, a private nonprofit corporation dedicated to improving the quality of life for low-income people, opened its first shelter in 1987. Since then, SMOC has developed about 35 buildings, creating about 500 housing units statewide in communities such as Natick, Framingham, Marlborough, Hudson, Worcester, Palmer and Ashland. Most of its residences are sober housing.

“We don’t really want to build any more shelters. In the long run, it’s not a humane response. We want to create more housing opportunities and options,” said James T. Cuddy, SMOC executive director.

SMOC has tried to recreate the lodging-house networks that once existed in these communities. Gretchen B. Arntz, chief development officer of Emmaus, a community housing development organization based in Haverhill, also noted that people are more isolated now. Informal networks and neighborhoods have disappeared, as have short-term single-occupancy units and state psychiatric hospitals.

In response, Emmaus operates two traditional emergency shelters, as well as several residences and a 34-unit apartment building, all in Haverhill. Since its inception in 1985, Emmaus has developed a total of 65 units of affordable housing.

Arntz noted that the average age of a homeless person in Massachusetts is 8 years old. A working-age individual would have to work 120 hours at minimum wage to be able to afford a typical two-bedroom apartment in Greater Boston and still have money left over for food, clothes and other necessities, she said.

“The reality is that many people have to choose between eating and having an apartment,” Arntz said.

With that in mind, Emmaus is aiming to put a few more affordable housing projects on line in the next year or two.