Renovating Candy Strickland's home--a one-story, wood-plank Army barracks built during World War II--has been declared a losing battle by top officials of the Alexandria Redevelopment and Housing Authority that owns and operates 68 of the converted buildings as the Cameron Valley housing project.

Strickland, 29, says she, her husband and 13-year-old son dread the coming of winter because icy air slices through the unit's rotting walls almost as easily as rain leaks through the worn roof. Last week, her washing machine's waste water backed up in her kitchen sink.

"It's a real dilemma. We know they won't last," City Housing Authority Director Angus T. Olson said of the project, on Duke Street in south central Alexandria. "We have projected by the end of the decade all the units will have to be replaced."

That, city housing officials said, is bad news to the city's poor. Alexandria's housing stock for its low- and moderate-income residents continues to dwindle as area property values climb and the well of federal rent subsidies has almost run dry under the Reagan administration.

But Olson sees hope in a new approach the housing authority is exploring to create housing for the poor.

Capitalizing on its ability to issue tax-exempt revenue bonds, the housing authority is trying to interest private developers in joining with them in partnerships to upgrade existing apartment complexes.

The idea, Olson explains, is to use the housing authority's low-interest bonds to lower a developer's costs in buying and renovating older apartment buildings. In return for financing, the developer would agree to "set aside" 20 percent of the units for low-income tenants for at least 10 years.

Those apartments' rents would be held artificially low by using profits from the remaining 80 percent of the going-market rents and possibly would be reduced further by additional revenue the housing authority would recycle into the project, Olson said.

"This is the only way it can be done in today's economy," he explained. "I don't think we'll see any more massive, large monoliths of public housing."

Last July, Alexandria's first attempt to create new housing for the poor without federal assistance began to take shape at a 39-year-old garden apartment complex on the city's northwestern edge, said H. Winfield McConchie Jr., chairman of the housing authority's board.

Dominion Gardens and three smaller neighboring complexes--Dixie Gardens, Green Apartments and Alabama Apartments--are for sale, and the housing authority and a Washington development company are interested in working together to redevelop the 498 units for lower-income tenants.

"The bottom line is that people of moderate and low income will be served by the project," said Jim Edmondson of Edmondson and Associates development company. "And there is some economic incentive to do this."

Olson estimated the project would cost as much as $15 million, but Olson and Edmondson insisted that whatever the extent of the project's redevelopment, rents will remain low.

For example, Olson said rents for one-bedroom apartments would increase from the current $335 a month to $345 to $360 a month when the project is finished in 1985. Rents for the same apartment among those set aside for the poor would cost $300 a month, which is about twice the average rent Cameron Valley tenants now pay.

But Olson said those rents could be further reduced if the housing authority is paid by the developer to manage and mantain the project.

In late July, the housing authority's board of commissioners issued a resolution of intent to get involved in the project. But Edmondson said his company's plans have been delayed by the death of Dominion Gardens' owner V. Brook Layton. With his estate yet to be settled, the purchase of the property has been placed in limbo.

Olson said he is optimistic that a sale can be arranged. "This concept is innovative," he said, "and things like this are what we are going to have to do."