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Tammy Tuttle, a former addict, is one of the homeless who has found a home thanks to the province-wide initiative to try to end homelessness. ((Niall McKenna/CBC))

The Alberta government has announced a contribution of $12 million to create 112 housing units for the homeless in Edmonton and Calgary.

The announcement comes on the first anniversary of the provincial program aimed at ending homelessness in 10 years.

The Mustard Seed Society, a non-profit Christian ministry, will head up the initiative. It's based on what the government calls a Housing First approach, which provides permanent housing along with support services.

"Today, shelter use is down in all major Alberta cities," said Premier Ed Stelmach at an event Tuesday organized to announce the funding.

"More than 1,300 formerly homeless people have been permanently housed and are receiving the support they need to break the cycle of homelessness."

The province has committed $100 million to create housing for the homeless over the past year. A further $100 million has been committed through the 2010 budget.

'Attacking the root causes'

The strategy is to do more than manage homelessness through more spending on shelters, said Housing and Urban Affairs Minister Jonathan Denis.

"We're also looking to end homelessness as we know it today by attacking the root causes."

The province has 11,000 housing units under construction now to take advantage of lower construction costs in a slower economy, he said. He added he can make a solid business case for the funding.

"Studies show it can cost upwards of $100,00 per year in health, emergency and justice systems to support an individual who's chronically homeless," he said. "But under Housing First, it costs less than $35,000 per year to provide permanent housing and the supports they need to break the cycle of homelessness."

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Rev. Sam Breakey of the Mustard Seed Society says the group hopes to have 30 units available for the homeless by next year. ((CBC))

The Mustard Seed's Edmonton proposal has been given just over $3 million, which will be used to create 30 small apartments in existing buildings, said Rev. Sam Breakey, who works with the organization.

Potential locations have been scouted, he said, but no firm decision has been made, in spite of the grant's stipulation that the units must be available in a year.

"We still want to work with community associations to determine what the best setting is," he said. "We want to be sensitive to the needs of the city, we want to partner with groups of people that want to make a difference in the city for homeless people as well."

The funding formula requires 70 per cent of construction costs from the province, with the Mustard Seed Society raising the difference needed for housing and to provide services.