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NEXT TIME you rush pass that scruffy-looking guy lying on the sidewalk grate and surrounded by blankets and trash, consider this: He's worth a lot of money - $35,000 to $150,000 by some estimates.

That's what the federal Interagency Council on the Homelessness says it costs to care for the chronic homeless, those who bounce from service agencies, to hospital emergency rooms, to substance-abuse programs, through the law-enforcement and court systems, and back again.

For the past decade, those at the forefront of helping the homeless have emphasized shelters and mental-health services. But this policy direction has been a costly failure. Studies show the obvious: What the homeless need are, well, homes.

That's why we applaud Mayor Nutter's plan for the city to give homeless families and individuals what they need: homes and apartments, 500 in all. It'll also create 125 transitional-housing opportunities for the chronic homeless, with more units in 2010-12. This sets the city on a path that will show results for everyone: the homeless, the city, and the taxpayer.

The stability and security of a place to live is not just an intervention for the homeless. It can be a way to help people get themselves together, to get help for addictions or other ailments, and to get a job. And it's the most cost-effective solution. The Interagency Council estimates that the same person who cost the system up to $150,000 could, with a place to live and with services, cost it only $25,000. Nutter's plan, which also calls for the continued operation of two overnight cafes, which can handle a maximum of 50 people each and 75 more "safe-haven" and residential-treatment beds for the hard-to-reach homeless, tweaks former Mayor John Street's 10-year plan released in 2005. The Philadelphia Housing Authority is providing the 500 apartments and houses.There's one piece missing so far from the local plan: involvement of the business community. Atlanta businesses invested $42 million into a plan to get people off the streets. Our businesses need to get more active in this fight, including the tourism industry and the chamber of commerce. Nutter's initiative puts Philadelphia on course to attack homelessness in pragmatic ways that work. Its success ultimately depends on whether Nutter keeps his focus on an issue the rest of us see every day, sitting in the parks or lying in the streets. *