Rising Cedar Apartments is pioneering a new affordable housing model with three key components under one roof.

The innovative Minneapolis development provides 40 permanent supportive housing units to adults with serious and persistent mental illness. It houses the headquarters for Touchstone Mental Health, the project’s service provider. And it features a community health and wellness center for residents and the public.

Developed by Project for Pride in Living, Rising Cedar also offers residents three meals a day, independent-living skills assistance, and health-care coordination.

The $11.7 million development is showing that permanent supportive housing can save millions of public dollars by reducing hospitalizations and other costs. It costs $64,970 per year to house and treat one adult at Rising Cedar, whereas a traditional psychiatric nursing home, on average, costs $246,375. In the first nine months, the project is estimated to have saved more than $2 million.

The 72,000-square-foot development serves as a replicable model for others to meet the needs of people with mental illness, says Mary Novak, senior project manager at Project for Pride in Living.

“It’s had a real impact,” Novak says.

The units are reserved for residents earning no more than 30 percent and 50 percent of the area median income. All are subsidized by Hennepin County in the form of Transitional Subsidy Program Vouchers and Group Residential Housing Subsidies.