Due to the significantly high levels of comorbid substance use and mental health diagnosis among urban poor populations, examining the intersection of drug policy and place requires a consideration of the role of housing in drug user mental health. In San Francisco, geographic boundedness and progressive health and housing polices have coalesced to make single room occupancy hotels (SROs) a key urban built environment used to house poor populations with co-occurring drug use and mental health issues. Unstably housed women who use illicit drugs have high rates of lifetime and current trauma, which manifests in disproportionately high rates of post-traumatic stress disorder (PTSD), anxiety, and depression when compared to stably housed women. We report data from a qualitative interview study (n=30) and four years of ethnography conducted with housing policy makers and unstably housed women who use drugs and live in SROs. Women in the study lived in a range of SRO built environments, from publicly-funded, newly built SROs to privately-owned, dilapidated buildings, which presented a rich opportunity for ethnographic comparison. Applying Rhodes et al.’s framework of socio-structural vulnerability, we explore how SROs can operate as “mental health risk environments” in which macro-structural factors (housing policies shaping the built environment) interact with meso-level factors (social relations within SROs) and micro-level, behavioral coping strategies to impact women’s mental health. The degree to which SRO built environments were “trauma-sensitive” at the macro level significantly influenced women’s mental health at meso- and micro- levels. Women who were living in SROs which exacerbated fear and anxiety attempted, with limited success, to deploy strategies on the meso- and micro- level to manage their mental health symptoms. Study findings underscore the importance of housing polices which consider substance use in the context of current and cumulative trauma experiences in order to improve quality of life and mental health for unstably housed women.