Mandurah has been announced as the location for the second Common Ground facility following 84 rough sleepers and a high number of residents on low incomes being identified in the area.
This model will provide a person experiencing chronic homelessness with access to permanent housing, which is linked with relevant support services to overcome complex histories.
The announcement comes after the City and a number of community leaders pushed for more permanent housing options.
Mandurah mayor Rhys Williams, who welcomed the news, said the Common Ground facility was essential in addressing homelessness.
"We know that Common Ground being a housing first model is essential for addressing homelessness for local people who are living on the street," he said.
"We know that by giving someone a place to live with wraparound services such as counselling, and addiction treatment it gives homeless the chance to get back on their feet and become contributors.
"Mandurah has an unacceptable level of homelessness and we are doing everything we can to try and manage that on a day to day basis but it is going to be housing that ultimately addresses this issue."
In other regions, the Common Ground facility has been found to reduce demand for emergency, police and justice services.
Mandurah MP David Templeman said the housing first model would give Mandurah's homeless the best chance to get back on their feet.
"Homelessness is an issue that growing cities are grappling with across Australia and internationally, and unfortunately Mandurah is no exception," he said.
"The Common Ground model has a strong record in improving long-term outcomes in other jurisdictions, so this facility will give people experiencing homelessness the best chance of getting back on their feet.
"I look forward to working with my colleagues and the City of Mandurah on this project to increase permanent housing and supports for vulnerable members of our community."
A total of $35 million has been allocated for the Mandurah and East Perth Common Ground developments.
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