Fifteen years ago, during the bad old days of New York, the neighborhood of central Harlem surrounding St. Nicholas Avenue was a war zone of drugs, gangs, and violence. Forty-one murders were committed there in 1990, the first year of David Dinkins’s watch from City Hall. The last thing any reasonable person would have expected to see would be “Luxury Condos Available” signs dotting the neighborhood.

But take a walk down lower St. Nicholas Avenue today and see striking evidence of a new Harlem Renaissance taking shape. Buoyed by dramatically lower crime rates (there were a comparatively few eight murders in central Harlem last year) and an intelligently aggressive public-private housing development policy, perennially empty lots and burned-out abandoned buildings are being replaced at a rapid rate by architecturally attractive mixed-use buildings, combining commercial tenants with both market-rate and subsidized housing. Upscale clubs and coffeehouses are now neighborhood fixtures, and “luxury condos available” signs are unremarkable parts of the landscape.

Much of the credit belongs to an obscure public benefit corporation that funds affordable housing at no expense to taxpayers. If this sounds like an all-around good deal, it is.

The Housing Development Corporation was inaugurated under Mayor Lindsay and Governor Rockefeller. Alternately successful and controversial under subsequent administrations, investments in Harlem and other areas begun under Mayor Giuliani are now reaching fruition under the high-priority drive of Mayor Bloomberg. He tapped Wall Street veteran Emily Youssouf to head the agency. With HDC’s help and the efforts of the Department of Housing Preservation and Development, long-blighted neighborhoods are turning around block by block.

No longer is city government the infamous “landlord of last resort.” The number of private buildings abandoned to government custody or seized for nonpayment of taxes has declined to less than 3,400 today from more than 100,000 in 1979. The days of New York’s inner city looking like stretches of postwar Dresden are just a rumor to a younger generation of New Yorkers.

For fiscal conservatives and budget watchdogs, the best thing about HDC is that its AA bonds are not a debt of the state or city of New York. The necessary good government aim of increasing affordable housing is being financed through the markets. Its tax-exempt bonds are used to finance first mortgage loans to qualifying private developers. Moreover, HDC has no taxing power and does not receive any taxpayer funds. This has not affected HDC’s effectiveness.

With only 125 employees, the HDC functions like a lean mortgage bank with a philanthropic mission, creating or preserving 8,000 units of lower- and middle-income housing over the last two years alone.

“We’re trying to provide quality housing,” Mrs. Youssouf explained in an interview. “You don’t want to create all low income all the time. Dealing in some mix is a great thing to do, because it’s an integrated city. Neighborhoods should be integrated. Buildings should be integrated … The concept is to give people good, decent, and affordable housing to live in, and then they’re able to save money and eventually go out and buy something. That’s how it should work.”

In an election year, Democratic candidates are prone to trotting out applause lines calling for more public housing. But their rhetoric often ignores reality. For example, the president of Manhattan, C. Virginia Fields, recently released one of the first detailed policy proposals of her campaign, pledging to create 10,000 new units of housing over 10 years. That sounds great, but it lags significantly behind the Bloomberg administration’s current pace of housing development.

The 80/20 formula – which combines 80% of new units at market rate with 20% set aside for lower-income housing – has been used to anchor HDC-backed developments in neighborhoods ranging from Morrisania and Highbridge in the South Bronx to Court Street in downtown Brooklyn. And despite the fact there was no mandate for affordable housing in the post-September 11 Liberty Bond program, almost 2,000 new units have been allocated under that program. New housing for military families has come in the form of 228 new and rehabilitated townhouses on the Fort Hamilton base.

But perhaps the success that is underway is most striking in central Harlem. At corners on St. Nicholas Avenue where drug dealers once ruled, there is now a Rite Aid and a UPS store. The Moca Bar boasts Soho-style decoration, and an organic food mart named the Karrot is getting ready to open, while a combined coffee and fresh pastry shop offers outdoor seating where patrons play chess. The new housing provides the anchor to this neighborhood renaissance. Let the civic textbooks of the future show that it was not local politicians’ promises but crime reduction and market-driven public private partnerships that made such a turnaround possible.