An increase in the number of unsheltered homeless people in the urban core has state officials rethinking their efforts for the area and trying to figure out how to deal with people who have been on the streets for months or years and have mental-health or substance-abuse problems.

The shift comes as the city is also trying to do more to help, with a new 100-unit affordable housing project in Chinatown that would offer support services. And although many agree more needs to be done to move people off the streets in the urban core, not everyone is happy about the proposed $10.5 million River Street Residences, which would offer long-term housing, largely to the chronically homeless.

Dozens attended a community meeting Wednesday to learn about the proposed River Street project and several expressed concerns about how the development would affect the community. Some said that they liked the concept but didn't want it in the area for fear it would pose a safety threat.

"The community's concern is security, and also the area, whether it's suitable for housing mentally ill people," said Chu Lan Shubert-Kwock, president of the Chinatown Business & Community Association, which has not yet taken a position on the project. She said the community appears to be split.

Shubert-Kwock added she is worried about the rise in homelessness in urban Honolulu.

"Anytime you come to Chinatown after 5 p.m., they're there," she said.

The discussion over homelessness in the urban core has intensified over the past year, as residents and merchants from Waikiki to Chinatown have said the problem appears to be getting worse. Their suspicions were confirmed last week, when a city-commissioned point-in-time count showed the number of unsheltered homeless in the city, from Salt Lake to Hawai'i Kai, increased by 30 percent from 2007, from 435 people to 566.

It was the only region of O'ahu to see an increase in the number of homeless.

Islandwide, 1,193 homeless were counted — a number advocates said is conservative.

Although officials say the homeless situation in the urban core is still not as dire as that on the Wai'anae Coast — the epicenter of Hawai'i's homeless crisis — they acknowledge that the problem is on the rise and that the homeless population in urban Honolulu could require a different approach. They say that most of the urban homeless are single and could have mental health issues.

About 45 percent of the unsheltered homeless in the urban core are "chronically homeless," according to the new count, a definition that includes anyone who has been on the streets for a year or more.

By comparison, 11 percent of the unsheltered homeless counted on the Wai'anae Coast fall into that category.

Russ Saito, the state's homeless solutions coordinator, said that until now much of the emphasis in addressing homelessness has been to help those who "are willing and able and I think we've done that." But the results of the new count, he said, add more urgency to the need to help the chronically homeless — some of whom might need intensive services before they will even set foot into a shelter and follow a plan to stay off the streets. The chronic homeless situation "especially needs to be addressed," Saito said recently.

"We're trying to figure out how to do that."

Although there are no immediate plans to expand state funding for programs aimed at the chronically homeless — especially given the tight fiscal times — the new focus represents a shift for the administration in handling the homeless crisis. Over the past three years, the state has spent upwards of $40 million to open emergency and transitional homeless shelters, mostly on the Wai'anae Coast and mostly geared toward families.

Saito said the biggest emphasis now is to create affordable housing so homeless in shelters can move on to long-term housing. But he also said that some new thinking needs to be done to address the chronically homeless, who studies have shown eat up more resources through services, emergency room visits and jail time. And Saito said he doesn't believe building more shelters is the answer, pointing out that several emergency and transitional shelters in the urban core have empty beds.

"We think we have enough shelters to process people if they're willing to be processed," he said.

Advocates agreed more shelters probably aren't the answer. But several added that recent state cuts have eroded some of the services for the chronically homeless, including a program offered through the state Adult Mental Health Division.

"We know a very large percentage of people who are homeless have mental health problems," said Marya Grambs, executive director of Mental Health America of Hawai'i. "We absolutely need to be able to address that."

One of the programs trying to help the chronically homeless in the urban core is Safe Haven, which opened in 1995 in Chinatown and serves those who have been on the streets for prolonged periods, have severe mental illnesses and are considered vulnerable.

The transitional shelter, where clients usually stay about 18 months, has 25 beds and a waiting list of about 25 people these days. Six months ago, about six to eight people were on the waiting list.

Project Director Pamela Menter said Safe Haven works to stabilize homeless with mental illnesses before placing them in long-term housing. Once they leave the shelter, case managers still monitor their progress. She said the project shows that the chronically homeless can be helped — but that it takes time and money. Still, she added, getting the chronically homeless housed has been proven to be cost effective.

"They really cost all the taxpayers a lot of money" when they're on the streets, she said.

Ronnie, a 22-year-old who has schizophrenia, is one of the tenants at Safe Haven.

He's been at the shelter for six months.

Ronnie, who asked that his last name not be used, said he became homeless at 12 years old in Las Vegas and stayed on the streets until he was 18, getting into a drug addiction program in Nevada before returning to the Islands where his father lives.

Ronnie was born in Kailua, but raised in Las Vegas by "drug dealers, killers," he said. He used to get high off embalming fluid, he said, and rarely attended school. He estimated that he was arrested at least 20 times for various offenses.

Today, after four years of getting help from agencies, he still grapples with his mental illness.

But he says he is making plans, with the help of Safe Haven case managers, to move into a home of his own soon.

Like Safe Haven, the city's River Street Residences project would largely cater to chronically homeless people, many with mental illnesses. The project, though, would provide long-term housing — not shelter beds.

Debbie Kim Morikawa, city Department of Community Services director, said the affordable development would use a "Housing First" model pioneered on the Mainland that addresses chronic homelessness by getting people into "housing first" — and then addressing their other problems. The city is proposing to offer studio- and one-bedroom units, and plans to select a nonprofit to kick off construction of the project by June 2010.

"This approach does work," Morikawa said. "It's very clear we've tried everything else."

Meanwhile, Saito said the state's Next Step shelter in Kaka'ako will remain open — at least through the next fiscal year. The shelter opened in 2006 as part of the state's push to address the homeless crisis. When it first opened, it largely served families. Now the warehouse, which has cubicles as living quarters, is mostly occupied by singles.

Utu Langi, who manages the shelter and also runs Hawai'i Helping the Hungry Have Hope, said he has noticed an increase in homelessness in the urban core — including in the parks and streets surrounding the Next Step shelter. He said some of the homeless have simply fallen on hard times, after losing a job or getting their hours cut, while others are chronically homeless and may have been shifted from other areas of O'ahu.