In Tacoma, a Residential Rebirth

WHEN Wendy and Michael Dinon decided to buy their first home, they focused on new construction near downtown Tacoma, Wash., where Mr. Dinon works as an index analyst for the Russell Investment Group. Last October, the couple, who have a 2 ½-year-old daughter, Milly, found what they were looking for: an affordable three-bedroom house in the Salishan neighborhood, two miles east of downtown.

Skip to next paragraph Enlarge This Image Duncan James Livingston for The New York Times

Buyers Michael,Wendy and Milly Dinon.

"Price is what drew us," said Ms. Dinon, whose 1,700-square-foot house cost 6,000, the market rate for Salishan but about 20 percent less than comparable properties in other neighborhoods. Her husband's 10-minute commute was also a factor. But Ms. Dinon said they also liked Salishan's diverse population, which includes Cambodian, Vietnamese and Russian immigrants. "Had we purchased regular tract housing, there wouldn't be such a sense of community," she said. "There is so much knowledge to be gained from all the different people here."

Until a few years ago, Salishan presented a different image. Its previous incarnation, as a public housing project, with 855 barrack-style homes built in the 1940s, was notorious for its high crime rate. In 2004, the Tacoma Housing Authority began to demolish the project and move its 3,000 tenants to other public housing or subsidized rental units.

The new Salishan is a Hope VI development, a program of the Department of Housing and Urban Development that converts distressed public housing into mixed-income communities. The developments continue to serve poor residents but also provide market-rate homes for sale.

Late last year, the first phase of the Hope VI neighborhood opened to new as well as former residents - 30 percent of whom have so far decided to return.

Phase 1 consists of 90 market-rate houses, 40 below-market-rate houses for sale to buyers with incomes less than 60 percent of ,584, the city's median, and about 300 subsidized rental units - town houses and apartments in multifamily buildings.

When the 188-acre development is completed in 2009, it will have about 250 market-rate houses, 100 below-market-rate houses and 815 subsidized rentals. Financing for the project includes a million federal Hope VI grant, million from the Washington State Housing Trust Fund and about million in private funds generated from the sale of low-income tax credits.

Salishan recently won a housing award from the American Institute of Architects and a neighborhood design award from the Congress for the New Urbanism. Its New Urbanist-style neighborhood includes single-family houses and Craftsman-style town homes, with porches, that sit amid pocket parks and playgrounds. Michael Mirra, the executive director of the Tacoma Housing Authority, says the multifaceted community has raised local property values, has catalyzed new development and is "building large scale equity" in the city of Tacoma.

Salishan also embodies the aspirations of a city that has historically languished in the shadow of Seattle, 36 miles to the north. Situated on Puget Sound, Tacoma (population, 200,000) has a reputation as a gritty metropolis. It was an image perpetuated by industrial pollution in Commencement Bay and a string of high-profile crimes, including a murder-suicide committed by the city's police chief in 2003.

"Tacoma does have that stigma," said Beau Towne, a local real estate agent. But, Mr. Towne said, the city is undergoing a renaissance. He cited the expansion of the University of Washington's local campus; a thriving artists' colony that is linked to the Museum of Glass; and the proliferation of mixed-use developments along the Foss Waterway downtown.

"Tacoma is a regional city," Mr. Mirra said. "We count Salishan as part of our effort to provide high-quality affordable housing for families with children." The median housing price in Tacoma is 4,000. In Seattle, it is 0,000.

Like Tacoma itself, the old Salishan was famous more for its seediness than its assets. In 1990, there were 331 violent crimes reported there. "It was a nightmare," Mr. Towne said. "You just didn't go there."

But the former reputation did not keep the new buyers away. Salishan's market-rate homes sold out on release, according to the builder, Quadrant Homes. About half of the 40 below-market-rate homes - priced at 0,000 to 9,000 - were sold to families who had lived in the old public housing project. Quadrant sold some of the below-market-rate homes on a first-come, first-served basis. The Tacoma Housing Authority also sold some and gave priority to residents living in subsidized housing, who were put into a lottery.

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