ALBANY, N.Y.—Abandoned lots and burned-out houses cluster in some of Albany’s oldest neighborhoods. There are more than 600 abandoned homes in New York’s capital. The disrepair puts pressure on properties nearby, dragging down values.

“We see our housing investments swallowed up by the abandonment which surrounds them,” said Steven Longo, executive director of the Albany Housing Authority (AHA).

AHA is fighting deterioration in the historic Arbor Hill neighborhood, using the last off-site phase of the HOPE VI revitalization of the Edwin Corning Homes in North Albany to fill the gaps left by blight.

The two Arbor Hill phases of Corning Homes are located a mile away from the original 34-acre site because the surrounding neighborhood is built out.

The redevelopment began with a 1998 grant from the Department of Housing and Urban Development’s (HUD’s) HOPE VI program. The project transformed 292 units of distressed public housing into 134 public housing apartments and 26 market-rate rental apartments on the original site.

In November, the Albany Housing Authority and its development partner Northstar Development USA plan to start construction on 23 new public housing apartments. The project involves rehabbing three old buildings and constructing four more from scratch on vacant lots, all on a single block in Arbor Hill.

“We are consolidating our investments so that we have an impact on a block-by-block basis,” said Longo. The neighborhood could certainly use the help. “This is an absolutely blighted block with tremendous crime.”

The development cost for the 23 apartments at Arbor Hill is expected to be $6.5 million. The project will be paid for in part with the last $2.5 million in HOPE VI funding from the original Corning Homes grant. The Arbor Hill apartments also received $2.5 million from the sale of low-income housing tax credits, $1 million in HUD Replacement Factor funding, $250,000 from the Federal Home Loan Bank of New York, and $200,000 from the Main Street program administered by the New York State Department of Housing and Community Renewal.

AHA’s work in Arbor Hill has already begun to show results. Earlier this year, AHA finished 54 duplex units at Arbor Hill Homes, the homeownership phase of the HOPE VI project.

This February, one of those houses appraised for $120,000. “A year before that, comparable units on the same block did not appraise for even $90,000,” Longo said.

The new Arbor Hill apartments could work a similar magic on Swan Street, according to Longo. “We are going to have the critical mass to really turn this block around,” he said.