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Dave (first name only) a homeless panhandler asks for handouts on the conner Burrard St. and West Georgia St. in Vancouver January 4, 2011. A Snowfall Warning was issued for the low mainland for tonight and tomorrow morning.JOHN LEHMANN/The Globe and Mail

For almost three years, 300 of the city's most troubled residents – many of whom had lived on the streets for years – have been provided with guaranteed housing and a barrage of support through a federal research project.

But the money for that project will run out in six months and there's no sign from the federal government that there will be an extension, which had been expected by the end of September.

That has those residents, the researchers working with them, businesses groups, and city councillors alarmed about the devastating impact they see coming for those 300 people – and the city as a whole.

"We're really fearing that we're going to see in the spring a major uptick in homelessness," said Vancouver Councillor Kerry Jang, whose political team is committed to ending street homelessness by 2015. "We're all quite anxious."

Researchers in five cities, with a budget of $110-million from the Mental Health Commission of Canada, have been examining what strategies are the most effective for stabilizing the lives of homeless people. In Vancouver, 500 people are involved.

About 200, a control group, are getting "treatment as usual" – they find their own housing and plug into the social-service network as best they can. Nothing will change for them if the research project ends.

Another 200, half with severe problems, half with milder problems, are in apartments scattered around the city, but are visited by intensive-care teams who help negotiate with landlords to ensure they can stay, as well as providing other kinds of social support.

And 100 have been living at the former Bosman Hotel in downtown Vancouver, where there is an intensive-care team on site that provides social, medical and vocational support.

Lead investigator Julian Somers said that, if everyone ends up having to go back to square one, it will have a profound effect on the city.

"It will ripple throughout the hospitals and the justice system, everywhere," he said.

Mr. Somers, also a Simon Fraser University psychologist, oversees the Vancouver part of the nation-wide research project called At Home/Chez Soi.

Mr. Somers said he is already noticing that a few people are starting to leave the research project housing because they're worried that they won't be able to find anything in the rush of people searching when the program ends.

"It's a telling phenomenon about people's level of anxiety," said Mr. Somers, who has observed that most people leaving are going back to the Downtown Eastside because it's where the rents are cheapest and where they know the network of food and social-service providers.

Charles Gauthier, who sits on a community board for the Bosman Hotel facility with some of the residents, said they've been telling him the last couple of meetings how worried they are.

"They feel their life has turned around the last couple of years. I imagine for a lot of them it's going to be quite a traumatic experience and they'll just go back to where they were before."

Mr. Gauthier, the executive director of the Downtown Vancouver Business Improvement Association, said there has been a noticeable reduction in people sleeping outside and panhandlers who harass people aggressively the last few years.

That's partly because of At Home project and partly because of an increase in winter shelter spaces.

The province is also halfway through a massive effort to add 14 new social-housing projects around the city.

In spite of all those efforts, the most recent annual count of people sleeping on the street or in shelters show there were still about 1,600 homeless people on any given night in Vancouver.

As those numbers have stuck at that level over the last two years and with winter coming on, the city and province are continuing to tussle about whether enough street homeless people are getting into the new buildings and whether there are enough winter shelter beds.

Last winter, the number of people sleeping on the street crept up to 300 from 145 after the province funded fewer beds than previous years.