Over the last years, affordable housing has become less accessible in Vienna and homelessness has remained a problem. This paper describes Housing First - a socially innovative initiative - and investigates how social innovations can complement or progressively modify the governance structures of the welfare state in order to better combat homelessness. The in-depth analysis scrutinizes the socially innovative potential of a pilot project on Housing First in Vienna, with regard to service delivery for the homeless and the respective governance structure. The specific governance system is characterized by a strong role of the municipal government as financing institution and regulator. The pilot project, however, has contributed to changing the governance system, leading to more deliberation of service providers and an incipient knowledge alliance for social innovation in this field. This has the potential to implement evidence-based policy-making as well as fostering social cohesion by striking the balance between equal access to housing for all and awareness of divergent needs of a socioculturally diverse Population.