For decades, panhandling and homelessness have been as much a part of the San Francisco (search) landscape as the bridges and fog. But now the nation's "Homeless Czar" is looking toward the Bay Area for possible solutions to America's homelessness problem.

In 2002, an estimated 8,640 homeless people were residing in San Francisco, often living in such decrepit conditions that their existence threatened the city's tourism industry.

However, the situation has improved. According to a study conducted by the city earlier this year, the number of homeless in San Francisco dropped by around 28 percent. City officials have attributed the reduction to a series of new programs.

"Historically, [San Francisco] had the worst street homelessness problem in our country," said Philip Mangano (search), executive director of the U.S. Interagency Council on Homelessness. "But it's had some of the most innovative ideas."

The city replaced welfare handouts with initiatives such as the controversial "Care not Cash" program, which provides housing and other support services; and "Project Homeless Connect," which enlists corporate volunteers to help the homeless find jobs.

"The greater involvement of the business community and the public is one of the challenges around our country," said Mangano, a former music agent who was appointed by President Bush in 2002. "That's why 'Project Connect' is so important. It brings the business community and the public into that larger partnership with government to get the job done."

"It's not only the individuals we're serving, it's the people that are helping serve those individuals whose lives are changing because thousands of them now feel empowered and part of the solution," said San Francisco Mayor Gavin Newsom (search).

Mangano said that he has begun putting together an interagency council from several local, state and federal agencies to study success stories like San Francisco to help develop a national strategy to combat homelessness.

Click in the box near the top of the story to watch a report by FOX News' Claudia Cowan.