For the few years both before and after Francisco Gonzalez's seven-month stint in Rikers Island, his home—if one could call it that—was a 24-hour Laundromat in the South Bronx. His shower, when the weather was warm enough, was a water pump outside, his hamper a small washing machine in one corner, and his bed, the hard-surfaced tables meant for folding clothes.

The man who ran the place would let him stay there in exchange for drugs—a trade Gonzalez, now 32, had been making since he dropped out of school in his early teens to peddle marijuana and crack on the streets. At the time of his arrest, he was using about as much product as he was selling, and when he got locked up in 2007 (on a parole violation stemming from an earlier drug charge) he was determined to stay clean.

"After I was released from jail, I desperately wanted help, desperately," Gonzalez says. "I wanted to turn my life around."

He came out of Rikers with a new resolve, but no place to stay. Sometimes he would go back to the Laundromat, crash at his sister's apartment or sleep outside in her car.

Gonzalez's experience is typical of many ex-offenders', who for a number of reasons, struggle to find a secure place to live and often end up shuffling back and forth between incarceration and homelessness. According to city data, 30 percent of New York City's homeless shelter entrants have been incarcerated, and the Urban Institute estimated there are 800 parolees staying in the city's shelters at any given time.

This cycle between jail or prison and the shelter system is a dehumanizing one, advocates say, not to mention expensive—studies put the cost of a city shelter stay at $68 per person, per day, while each state prison inmate costs $88 a day and a cot in a city jail runs $175. As cash-strapped governments cut criminal justice budgets and seek to lower prison populations to reign in spending, some experts see housing as an obvious solution: Address the barriers the formerly incarcerated face in finding a stable place to live, and you'll have fewer people behind bars.

"States are looking at the high costs of incarceration and seeing that, in the end, it saves them money to have these people out," says Gabriel Torres-Rivera, director of re-entry initiatives at the Community Service Society of New York, and a formerly incarcerated person himself. "A job and place to stay are the two most important things."

Martin Horn, former Commissioner of the city's Departments of Correction and Probation, says that for many parolees, housing can mean the difference between freedom and going back to jail.

"I always felt that housing was critical—I saw it so many times," he says. "I really don't know how to rehab people in prison. What I know is, some people coming out of prison succeed, and some fail. And it was clear that we had to fix the housing problem."

Very little cushion

There's a scene in nearly every prison movie where, upon getting out, the inmate is dropped off at the gates with a brown paper bag of belongings and a bus ticket, left to their own devices on where to go next.

"That's pretty much how it works," says JoAnne Page, president of the Fortune Society, a nonprofit that provides re-entry services and operates two housing complexes for ex-offenders. "If you come out of Rikers, you come out with a Metro Card. If you're homeless, you're just homeless. People have very little of any kind of cushion."

Page says the instability of city shelters, often plagued by violence and too-easy access to drugs, can be quicksand to someone coming out. A study by the Vera Institute of Justice found New York City parolees who lived in shelters after release were seven times more likely to abscond from parole than those who had other forms of housing.

Other options, though, can be equally risky. Moving back in with family, though helpful for some, can be detrimental for others, especially those with addictions.

"I got back to my old neighborhood, and back to my old habits," says Victor Rojas, 46, about his brief stay with relatives after serving time for drugs. A former Fortune Society client, he now works there as a counselor. "You end up in a situation you don't want to be in, and at some point, you end up back on the streets."

Trying to find an apartment in the private real estate market poses its own barriers, as landlords are often reluctant to rent to someone with a criminal background. On one interview for a potential apartment, Gonzalez remembers, the landlord asked, "If I was going to have friends over—if I was going to be pissing in the hallway."

Public housing hurdles

Even if they find a landlord willing, most people just coming out of prison—frequently without work or in a low-wage job—can't afford a private-market apartment without some kind of rental subsidy.

Over 600,000 low-income New Yorkers are housed through the New York City Housing Authority (NYCHA), either in a public housing development or with housing vouchers under the agency's Section 8 program. But for the formerly incarcerated, particularly those recently released, public housing is barely an option.

Under federal law, the Department of Housing and Urban Development (HUD) enforces outright lifetime bans on sex offenders and anyone convicted of producing methamphetamines from public housing. Among other former inmates, local authorities are charged with deciding who to accept and who to reject.

"[Housing authorities] find themselves in this situation of, 'Okay, I'm getting this very light restriction, but if something happens in my facility, I get slammed by HUD and I get slammed by the public because my projects aren't safe,'" says Ryan Moser, of the Corporation for Supportive Housing.

NYCHA background checks all applicants in a household over age 16, and typically enacts a period of ineligibility on those with convictions, ranging from two to six years from the end of parole, depending on the severity of the crime.

While it's not an all-out ban, "the odds are slim," that someone with a recent offense would get NYCHA to reconsider their application once its deemed ineligible, says Sally Friedman, legal director for the Legal Action Center. And with demand for public housing already greatly exceeding the city's supply, ex-offenders are "at the bottom of a very long list," Moser says.

However, NYCHA is reconsidering this policy, at least with one upcoming initiative in the works. The Family Re-Entry Pilot Program (FRPP), spokeswoman Sheila Stainback says, would allow formerly incarcerated parents to live in public housing so they could reunite with their families there (she would not comment on when the program would launch, but says it would be for "certain people, under certain circumstances.")

This is in line Mayor Bloomberg's "Fatherhood Initiative," launched in 2010, which engaged a number of city agencies—NYCHA and the DOC included—to provide father-friendly events and services.

Breaking the cycle

Advocates recognize, however, that access to public housing and securing an affordable place to live is not necessarily enough to keep many ex-offenders off the streets or permanently out of the criminal justice system.

"One size does not fit all," Page says. "The truth is, if you've got a 20-year drug history and you come from a [background of crime], there's no silver bullet. You can't just snap your fingers and transform."

In 2007, a collaboration of city agencies partnered with the Corporation for Supportive Housing to launch the Frequent Users Service Enhancement or FUSE program, targeting the populations that most experts say are the hardest to reach—those who need more than just an apartment to succeed.

FUSE provided housing vouchers (some of these Section 8 vouchers provided by NYCHA) to a group of carefully selected participants deemed "frequent users." Many had serious addiction or mental health issues, and all of them had been in a shelter or jail more than four times in the last year. In addition to housing, the participants had access to other services like mental health counseling, addiction treatment, and job assistance

"There was this core group of people who would get out of jail, enter a shelter, drop out of the shelter and end up back in jail. They were constantly re-circling," says Horn, then- Commissioner at the DOC. "The theory was that if you concentrate on the high-end users, you're going to get some results."

And results there were: 91 percent of FUSE participants were still housed at the end of the program's first year, a review found, along with a 53 percent reduction of jail days utilized and a 92 percent less shelter days—an estimate savings of $2,953 per person, per year.

Horn and others say that this supportive housing model—a stable place to live linked with social and economic services—is an extremely successful and cost-effective one.

It's what eventually helped Gonzalez turn things around. When he came out of jail, he was sober but still selling—"Doing my old dirt in my old neighborhood," he says—though street life was starting to weigh on him.

"I would look at an old man, a customer who was 60 or 70 years old, and I would look at him like he was my father," Gonzalez says. "I was selling this guy crack, and he could be my brother. This old man could be my father."

One day, when applying for public assistance, he happened to hear a presentation by the Fortune Society. That same week, he found himself at the agency's Long Island City office and a week after that, he applied to live in Castle Gardens, a hulking housing complex for ex-offenders that Fortune runs in Harlem.

His eyes fill with tears recalling how, on the day he moved in, there was a bag in the lobby with his name on it holding a pillow, sheets, a toothbrush—tokens of home.

At the Castle, as the building is called, Gonzalez joined an addiction treatment program, finished his GED, even took cooking classes. After seven months, he moved into his own apartment in the Bronx, found with Fortune's help. He still lives there, and is getting an Associate's Degree at LaGuardia Community College, where he also works as in the maintenance supply office.

Despite the success of programs like Fortune's, and FUSE (which is now being replicated in 13 other cities and counties nationwide), advocates say convincing governments—and taxpayers—to invest money in housing criminal offenders is, as CSH's Erin Healy puts it, "a hard sell."

Communities tend to rebuff supportive housing developments in their neighborhoods, citing safety concerns and other quality-of-life issues, and many lawmakers just don't see it as a funding priority.

"I wish I could say there was a huge pipeline coming down—there isn't," Healy says. "But I think the state understands that there is a better policy, a better way to go."

Page, at the Fortune Society, is less optimistic.

"It's an enormous struggle to keep what we do funded," she says. "It's painful. We were full the moment the Castle opened up. We turn away people whose lives we could change. We don't even dare count how many people we turn away."