Rumors about the future of the big Ridge Avenue men's shelter have lingered for years.

Now, the city has confirmed what all the talk anticipated: The homeless shelter, in the 1300 block of Ridge in North Philadelphia, will close at the end of 2011.

In an effort to redirect how Philadelphia deals with homelessness, the city's Office of Supportive Housing will not renew a lease for the 300-bed shelter and plans to adjust its approach to housing homeless individuals.

Dainette Mintz, who heads the office, said the city will try to place men from the shelter in permanent housing. In addition, it also wants to replace Ridge with smaller shelters that would each house as few as 75 men.

"We need to have people looking for more permanent housing instead of emergency shelter," Mintz said.

In many ways, the federal government is forcing this new approach.

The U.S. Department of Housing and Urban Development (HUD), which provides more than a third of the city's $98 million budget for homeless housing, is pushing for alternatives to shelters.

In a study this year, HUD concluded that moving homeless families and individuals into permanent housing was significantly cheaper than placing them in shelters. HUD found that in some cities, it cost as much as $1,000 to $3,000 a month to house homeless families in shelters.

The cost of maintaining beds at the Ridge shelter is not as high - only about $900 a month per person.

But Mintz said Philadelphia has a rare pool of federal funds available to help re-house the men at Ridge. As part of President Obama's economic-recovery spending, the city received a three-year grant of $21 million to help families and individuals.

In the first year of the grant, which ended last October, the city was able to relocate 500 families from shelters by offering them financial help with rents or delinquent utility bills, Mintz said. An additional 1,300 people were able to stay in their homes and avoid showing up at shelters because of similar help.

Mintz said housing specialists with five agencies under contract with her office would work with the Ridge residents to examine their options.

Philadelphia has 2,710 men, women, and children living in shelters, while 425 people live on the streets, 352 of them in Center City.

Among the men who live at Ridge, news of the shelter's fate was sinking in slowly.

"Some still don't believe it," said Robert Hayes, 44, while sitting in a common room that doubles as a place to eat and pass the day. About a dozen men sat around rows of folding tables, two playing chess, one in deep sleep, others talking in pairs.

Hayes had to move into the Ridge Center seven months ago, after a car accident left him without a job and with mounting bills. A budding cartoonist, he recently got a job as a security guard and is saving his money for his own place. He figures he'll have to pay between $500 and $700 a month in rent.

"I'll be able to do it," he said. "But if someone has a felony charge or a drug problem, there will be a lot of obstacles."

Thurman Kirby, 58, wants nothing more than to move out.

A resident since February, he ended up in a shelter after two strokes. Now receiving a monthly Social Security disability check of $642 a month, Kirby is frustrated by his lack of options.

Kirby applied at the Philadelphia Housing Authority for a Section 8 rent subsidy, but was told the wait would be years. The list for public housing was even longer. "We can't get proper housing, so how can we move out?" he said.

The Ridge Avenue shelter is the largest in the city's homeless system and also serves as the main intake center for homeless men, matching them with available beds at city-run shelters.

The facility is operated by Resources for Human Development (RHD), a Philadelphia-based nonprofit that runs social service programs across the country.

Julius Jackson 3d, director of the Ridge Center, said that when he joined RHD in 1995, the average stay at the shelter was 90 to 120 days. Now it's six to eight months, with about a third of the residents being there more than a year.

He said the hope was that in the months ahead, about half the residents would find new housing, including options like boarding houses or even pooling money to rent places together.

But he said that it will take the coordinated effort of many government agencies that handle not only homelessness but also public housing, mental-health services, and alcohol and drug rehabilitation.

"You can't just push a button to make this happen," Jackson said.

Councilman Darrell L. Clarke, whose North Philadelphia district includes the Ridge Center, said shelters "basically warehouse people. And when you put them out of view, it doesn't create the sense of urgency that should be there to take care of people on a longer-term basis."

The city knows from experience that it won't be easy to replace the Ridge Avenue facility with even one new shelter.

Neighborhood resistance to homeless shelters runs deep in all quarters of the city. An attempt in 2008 to convert a shuttered nightclub in Kensington into a 75-bed men's shelter was thwarted by community opposition.

Mintz said her office could fund, at most, three smaller shelters to replace Ridge. She said she was actively pursuing at least one existing site with proper zoning, but declined to disclose the location.

Even so, she acknowledged that not all of the 300 or so men now being housed at Ridge would have a place to move to at the end of next year.

"Folks have become very comfortable living in emergency housing," she said. "We need to change that paradigm."