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OBJECTIVE: The At Home/Chez Soi trial for homeless individuals with mental illness showed scattered-site Housing First with Assertive Community Treatment (ACT) to be more effective than treatment as usual. This study evaluated the cost-effectiveness of Housing First with ACT and treatment as usual.METHODS: Between October 2009 and June 2011, a total of 950 homeless individuals with serious mental illness were recruited in five Canadian cities: Vancouver, Winnipeg, Toronto, Montreal, and Moncton. Participants were randomly assigned to Housing First (N=469) or treatment as usual (N=481) and followed up for up to 24 months. The intervention consisted of scattered-site Housing First, using rent supplements, with ACT. The treatment-as-usual group had access to all other services. The perspective of society was adopted for the cost-effectiveness analysis. Days of stable housing served as the outcome measure. Retrospective questionnaires captured service use data.RESULTS: Most (69%) of the costs of the intervention were offset by savings in other costs, such as emergency shelters, reducing the net annual cost of the intervention to about Can$6,311 per person. The incremental cost-effectiveness ratio was Can$41.73 per day of stable housing (95% confidence interval=Can$1.96-$83.70). At up to Can$60 per day, Housing First had more than an 80% chance of being cost-effective, compared with treatment as usual. Cost-effectiveness did not vary by participant characteristics.CONCLUSIONS: Housing First with ACT appeared about as cost-effective as Housing First with intensive case management for people with moderate needs. The optimal mix between the two remains to be determined.