NEW ORLEANS -- Archie Lambert remembers when dead bodies and gunshots were an everyday occurrence in his neighborhood.

"I've seen bodies bleeding on every street around here," the 78-year-old recalls. "It was bad. Drug dealers, and all that, just took over. There was shooting going on all the time."

Lambert spent 40 years in the optimistically named Desire housing project, one of eight public housing complexes built in the 1930s that deteriorated into crime- and drug-riddled slums. By the 1990s, when New Orleans was the murder capital of the country, Desire and the nearby Florida project had the highest murder rate in the city.

Now the two projects are history, part of a plan by the Department of Housing and Urban Development to raze dilapidated public housing and provide the poor with modern, safe homes.

"We see this as a chance to make a real difference, not just patch things together temporarily," said Catherine D. Lamberg, interim administrator of HUD. The agency plans a series of state bond issues that could allow it to spend up to $270 million on the plan.

"It's actually less expensive to go in and start over than to try to fix what was there," Lamberg said.

New Orleans' projects became slums so dismal that in 2000 HUD seized control from the Housing Authority of New Orleans. Using a combination of grants, federal, state and city money, loans and bonds, more than 4,000 of the 13,000 old public housing apartments have been demolished.

Gone is the St. Thomas complex, a mix of empty apartments and disintegrating buildings where crime, murder and drug sales spiraled. Gone are the Florida and Desire projects, located on the street made famous by "A Streetcar Named Desire."

"You'd hear the gunshots every night," Lambert remembered. "We'd get out of bed and lay on the floor so one wouldn't come through the wall and hit us."

The latest to go was an infamous 13-story high-rise in the Fischer project -- the site of a series of high-profile murders in the 1970s and 1980s.

"I remember a murder investigation when we went into the apartment and thousands of cockroaches swarmed over the walls and ceilings," said chief Warren J. Riley of the New Orleans Police Department.

In replacing the demolished buildings, HUD is putting new ideas for public housing in place. The developments will have fewer units than the old, multi-story buildings had. They will also include a mix of public-housing units, low and moderate-income rental property and affordable homes for sale to public-housing tenants, officials hope.

The shift has been seen in cities across the country, as housing authorities move away from the large, high-rise development programs of the 1960s and 1970s in favor of housing vouchers and smaller, scattered site developments.

The federal government has given grants to local agencies to help them tear down dilapidated projects and replace them with mixed-income communities.

These days Lambert lives in a newly built duplex that has wall-to-wall carpeting, central air and heat, ceiling fans, a modern kitchen, even a comfortable front porch and big back yard.

The building is part of "Abundance Square," a new housing complex with 73 duplex and single-family rental units built in a style to reflect New Orleans architecture, with porches, shutters, and colorful paint.

It's given many of the old residents the desire to move back.