Developing housing for the chronically mentally ill (CMI) has recently been described as """"""""in some ways the most important and least developed component of care for patients suffering long-term disability"""""""". Yet, basic information is lacking concerning how housing is successfully developed and financed, what it costs, whether comparable benefits arise in different housing alternatives that have dramatically different costs, and whether current financing streams provide incentives for the most beneficial types of development. The proposed research represents a major step in closing these information gaps. The research has three specific objectives: (a) to develop a conceptual framework and analytic strategy, building on standard approaches to housing development cost analysis, for application to the new context of housing development for the CMI; (b) to apply this analytic framework to a sample of developments representing approximately 1200 newly developed CMI housing units in four metropolitan areas, thereby establishing the first available systematic data on total housing development costs for the CMI and a method for calculating costs in other housing markets; and (c) to examine how these properties were financed, the effects of financing on costs, and the influence of the incentives inherent in the funding streams on the characteristics of the housing that is developed as well as the entity that undertakes the development. This research would have implications for public policy and for the development of housing research in mental health. Government and voluntary sector decisionmakers are faced with the urgent need to develop strategies plans for meeting the housing needs of vulnerable populations. And as one of the first applications of housing cost analysis techniques to the new programmatic context of housing development for the CMI, this work will provide the field with a conceptual framework, methodological approach and set of estimates which future work can modify and improve. Importantly, it will also provide the underpinnings for a future stage of research in which the co-investigators will link the costs and benefits of alternative housing arrangements in a cost-effectiveness study.