On a beautiful Saturday afternoon in May, Harlem’s Frederick Douglass Boulevard is happening. Hipsters and elegant West African couples sip ginger juice and eat couscous at Les Ambassades’ outdoor cafe on 118th Street. Young businessmen with cell phones attached to their ears rush in and out of the UPS store up the block. Locals stand in line for the famous fried fish at Lovie’s Fish & Chips. The Moca Lounge won’t open until 5, but its elegant wooden facade looks beckoning – no ugly roll-down gates. And across the street at Harlem Vintage, wine lovers stream in for a tasting of roses. The slim, young Asian server pours wines made from esoteric grapes like Malbec, Lagrein, and Cinsault, and customers order cases to be shipped all over the city. The scene seems an unthinkably long way from the bad old days of the early 1980s, when the city government owned 70% of Harlem real estate and crime and drugs were rampant.

Welcome to the new Harlem, unquestionably one of the hottest neighborhoods in New York. The value of the average Harlem brownstone has increased 335% since 1995, in no small part due to cooperation between private developers and the city government, which worked together to make something of the whole blocks of derelict property the city foreclosed on in the 1970s. Today, the city has very little property left, “no more than 2,000 units,” Housing Development Corporation President Emily Youssouf said. “Most of the city-owned sites have been sold to developers to build housing. At the same time, private developers have bought property, with no help from us, to put up market-rate condos.”

Harlem brownstones now routinely sell for $1.5 million, and empty shells for $1 million. “1.5 is the new 1.2,” said a prominent residential broker, Willie Kathryn Suggs. “Last year houses went for $1.2 million, and shells sold for $800,000.”

However, the boom Ms. Suggs is talking about has largely taken place on Harlem’s glorious, brownstone-lined side streets and the historic sections of Morris Park and Strivers Row. Many of the avenues, including Frederick Douglass Boulevard, which is often called the gateway to Harlem, languished. “Nobody in their right mind went there in the early ’90s, much less bought a house there,” said Ms. Suggs.

Crime was a huge deterrent to investment, but under the Giuliani administration, the tide began to turn. “A drug gang that controlled 116th Street and Manhattan Avenue roamed the area,” said Ms. Suggs. “They had three or four murders a year attributed to them. The cops cleaned out the corner, threw them in prison.”

So far this year, the 25th Precinct has had three murders, more than neighborhood residents would like and an indication that the neighborhood is not yet 100% safe, but still a far cry from the 37 murders recorded in 1993.

In 1995, the Giuliani administration started a program called HomeWorks, under which small, vacant, city-owned buildings were rehabilitated into one to four-family homes by experienced builders. The buildings were then sold in a lottery to individual home buyers at market prices. The city subsidized purchases by providing no-interest, no amortizing loans that were forgiven if the buyer kept the property for six years. Still, in those years buyers who put down their life savings for a home in Harlem or the Bronx were making a leap of faith, said Tracy Paurowski, director of Marketing for HDC, which financed the loans.

The crux of the Giuliani strategy, which has been continued under Mayor Bloomberg, is to encourage homeownership.

“Homeowners anchor neighborhoods in good economic times and in bad,” said Carol Abrams, a spokeswoman for the Department of Housing Preservation and Development. “Homeowners who’ve invested a significant portion of their savings in their homes care about their property values, and care about good schools, safe streets, sanitation, and other neighborhood indicators. Home ownership has been the country’s primary vehicle for wealth creation – the national rate is 71% – and we want it here, helping to make neighborhoods vibrant and stable.”

The strategy worked, yet even as the brownstone-lined side streets came back, the avenues struggled. “From a planning perspective, Harlem’s avenues are not where they need to be,” says Ibo Balton, a neighborhood resident and director of Manhattan planning for the HPD. While the city government has been able to return 95% of its property in the neighborhood (almost 1,800 buildings and 26,000 units) to the private sector, it is only now reaping the fruits of its efforts on the avenues.

The Bloomberg administration’s major initiative for bringing back the avenues is Cornerstone, a multifamily, middle-income and market-rate new construction program that has produced 3,000 units in Harlem, 750 of which are in the Frederick Douglass Boulevard corridor.

One lucky new co-op owner is Jeanne Oliver-Taylor, vice president for Brokerage Services and Education at the Real Estate Board of New York. She paid $132,000 in 2003 for a two-bedroom apartment in Harriet Tubman Gardens, an eight-story, 73-unit co-op Cornerstone development between 120th and 121st streets on Frederick Douglass Boulevard. “I was so fortunate to get this apartment,” she said. “I am so thankful, so blessed, with neighbors that are caring and interested in one another.”

She barely squeaked by Cornerstone’s city-mandated income limits. Of the 73 units, 62 had to be sold to moderate-income households – those earning up to 165% of area median income or no more than $103,620 for a family of four. Another seven had to be sold to middle-income households earning up to 250% of area median income, or no more than $157,000 for a family of four. The developer was able to sell four penthouses at market rates, upward of $330,000. (There’s also a minimum income requirement of around $45,000.)

Ms. Oliver-Taylor’s apartment is pleasant and bright, overlooking a garden and a group of townhouses that were sold for $500,000. Her monthly maintenance is $636. “The townhouses were out of my price range,” she said. “But they’re awfully nice, and the top two floors are rental.” Harriet Tubman’s developer, Bluestone, retained the townhouses, and the ground-floor retail space rented by Harlem Vintage, a drycleaner, and a realty office. In other words, the development is helping put life back on the street through retail – and by providing customers.

“People always come first, then the restaurants and services and other good things,” Ms. Suggs said. “The city is doing what it’s supposed to be doing: setting an example. It’s turning this property over to good developers who are going to build, then keep the buildings in fine repair, sweep the sidewalks, be a good neighbor. For the longest time the city didn’t know how to be a good neighbor. It sold Harlem buildings for a dollar to people who didn’t take care of them, just sat on them. What good did that do us?”

Every single site on Frederick Douglass Boulevard is “programmed,” Mr. Barton said, that is, ready to be developed into moderate-, middle-, or market-rate housing.

Ms. Suggs does not doubt that the area is back. “Warburg on one corner, Corcoran on the other, Pru down the street, selling condos, going after the resales,” she said, referring to offices opened up by other real estate firms.

For Mr. Balton the true measure of the success of the city’s programs in the neighborhood is that development is now occurring outside them. “Go to 115th Street, where Harlem Horizon is going up – full market-rate. We had nothing to do with it. Not a penny is government.”