Townspeople started to house them in their homes, farms and stables. During the Renaissance, Geel became famous as a place of sanctuary for the mad, who arrived and stayed for reasons both spiritual and opportunistic. Some pilgrims came in hope of a cure. In other cases, it seems that families from local villages took the chance to abandon troublesome relatives whom they couldn’t afford to keep. The people of Geel absorbed them all as an act of charity and Christian piety, but also put them to work as free labour on their farms.
The "free labour" comment is a bit snarky. IIRC the Salvation Army finds that the people they help get more benefit if the assistance is conditioned on some labor (if possible, and tailored to the individual, of course. And of course in Madison this ran foul of minimum wage labor laws since the powers that be regarded it as a normal wage transaction rather than therapy.)
I'd written before that my thinking about how to deal with the homeless (the men mostly either mentally ill or addicts or both) was converging to something like "spending a couple of months in a monastery." The difference in wealth and position between the newcomers and old is small, the lifestyle is disciplined, the community has clear expectations that are not that hard to fulfill within the monastery, and there is plenty of useful physical labor to provide a realization of accomplishment and keep the idle body from moldering the mind.
But it sounds like the old Geel of small farmers would work too: tight community, a commitment to following Jesus and take in a stranger; the natives were obviously richer (they owned their farms) but worked hard to make them go; there was plenty of simple useful physical labor that the slower visitors could learn...
Community, commitment, simplicity, physical labor--from this simple layman's perspective those things would help the folks in the upper part of the distribution of homeless and mentally ill, maybe not enough to become independent but enough to have a role and be respected for their contribution. The low end I'm certain needs more radical help or intervention. But--here's the disadvantage of being a layman--I've no notion of what the proportions are, and a number-free article doesn't help much.
In any event the limiting factor is going to be the number of "monasteries". See what happened to Geel:
The limiting factor is not demand but supply. Few families are now able or willing to take on a boarder. Few now work the land or need help with manual labour; these days most are employed in the thriving business parks outside town, working for multinationals such as Estée Lauder and BP. Dual-income households and apartment-living mean that most families can no longer offer care in the old-fashioned way. People remain proud of the tradition, and credit it with giving Geel a broad-minded and tolerant ethos, one that has made it attractive to international businesses and visitors (these days it is probably best known for its annual reggae festival). But the town is no exception to the march of modernity and the irreversibly loosening social ties that come in its wake.
Modern aspirations — the increasing desire for mobility and privacy, timeshifted work schedules, and the freedom to travel — disrupt the patterns on which daily care depends. Increasing wealth is also a disincentive: most of the burden of care always fell on the poorer families, who counted on the supply of free labour and state payments to lift them above subsistence.
Would I be willing to take in strangers this way?
My answer is: "As my community and family life are currently structured, no." If it is just me and My Better Half providing the community and expectation, we can't do it. And I have a desk job; there's not much requirement for useful physical labor around here. (Scraping sidewalks and turning the garden dirt are intermittent tasks.) And other excuses--all true and all substantive. But suppose such a community of simplicity were to begin forming. Would I move and join? Even setting aside my family obligations; probably not. I like the kind of work I do and I'm good at it; absent a clear calling I'll try to keep doing it.