Objective People with severe mental illness have high rates of hospitalisation. The present study examined the role that permanent housing and recovery-oriented support can play in reducing the number and length of psychiatric hospital admissions for people with severe mental illness. Methods The study examined de-identified, individual-level health records of 197 people involved in the New South Wales Mental Health Housing and Accommodation Support Initiative (HASI) to compare changes in hospitalisation over a continuous 4-year period. Results On average, HASI consumers experienced significant reductions in the number of psychiatric hospital admissions and length of stay after entering the HASI program, and these reductions were sustained over the first 2 years in HASI. Male consumers and consumers under 45 years of age experienced the largest reductions in the number and length of hospital admissions. Conclusions The findings of the present study add support to the hypothesis that supported housing and recovery-oriented support can be effective approaches to reducing hospital admissions for people with chronic mental illness, and that these changes can be sustained over time. What is known about this topic? People living with severe mental illness are heavy users of health and hospitalisation services. Research into the effects of partnership programs on preventing unnecessary admissions is limited because of short periods of comparison and small sample sizes. What does this paper add? The present study extends previous research by analysing de-identified individual-level health records over a continuous 4-year period and showing that reductions in hospitalisation among people with severe mental illness can be sustained over time. What are the implications for practitioners? These findings provide further evidence that community-based recovery-oriented supported housing programs can assist consumers to manage their mental health and avoid hospital admissions. Although the provision of recovery-oriented community services requires an investment in community mental health, the reduction in consumers' use of hospital services makes this investment worthwhile.