Public housing is no longer the housing of last resort for the poorest of the poor in the city of Alexandria.

In fact, city housing officials are aggressively courting more middle-income residents, like teachers, firefighters, police officers, postal workers and nursing and administrative assistants to come live at their newest public housing development, an experiment in mixed-income tenants, where they will pay subsidized rents of only 30 percent of their adjusted income.

On Nov. 1, housing officials reopened the public housing waiting list -- which has been closed for several years because there have not been enough places for poor residents to go -- just to attract these moderate income workers to the new site.

The new development, called Chatham Square, sits on four acres in the heart of Old Town on the site of one of the city's oldest public housing projects, the now-demolished Berg. Although there are still 700 extremely poor people on the city's public housing waiting list who have been waiting anywhere from one to four years for public housing, the targeted middle income group will jump to the front of the line, according to housing officials.

"Usually people associate a public housing site with very, very low-income individuals," said William Dearman, chairman of the Alexandria Redevelopment and Housing Authority, in charge of public and Section 8 housing in the city. "We're reaching out to police officers, teachers, even our own staff, people who usually just assume that because something is public housing, they can't apply."

Of the 152 new Federalist-style townhouse Chatham Square units, 100 will be sold at market rates and 52 will remain city public housing. Some market-rate units have already gone for as much as $1.7 million, Dearman said.

Applications for the public housing units, which from the outside will look identical to the market-rate units, will be accepted through Nov. 30 by the Alexandria Redevelopment Housing Authority.

"We want a community that's more reflective of all the people that work in Alexandria," said Marye Ish, ARHA's director of housing operations. "We don't want to say, you have a right to work here, but you don't have a right to live here. That's kind of mean."

The move to recruit moderate-income workers for Chatham Square and other city public housing projects began with an act of Congress in 1998.

Since then, the U.S. Department of Housing and Urban Development has asked local housing authorities across the nation to shoot for a goal of 60 percent of the tenants in public housing to earn as much as 80 percent of the area's average income.

In Alexandria, where the median income is $85,400, meeting the federal goal would require a majority of people in public housing to earn between $26,000 and $68,000 a year. Every year that Alexandria doesn't meet that goal, officials must write a report explaining why, Ish said, and outline steps they're taking to change it.

The federal goal is a far cry from the city's reality today, where, Ish said, the average income across the city's 889 public housing units is about $14,000. Before they were relocated from the Berg, the 100 residents there earned, on average, $10,000 a year.

"Both parties are in need, the extremely poor and the working poor. I don't think I can be Solomon and decide between them," Ish said. "But it's almost discriminating against people who do work by saying, 'We don't think your need is as great.' There may be school teachers trying to raise three kids by themselves. They need housing just as much as those on a fixed income, particularly in a place like Alexandria, where housing is so expensive."

Housing advocates applaud the recognition that middle-income workers need help in order to live in a city like Alexandria, where rents and home prices are high and ever-rising.

"There are people who work in restaurants or as nurse's aides who just don't make enough money to live in a highly desirable urban area. So they end up living very far away and that makes the traffic worse," said Nancy Carson, with Housing Action, a local affordable housing advocacy group. "I think it's important to assist those people as well, and it's important for the community."

But, she said, not if it comes at the expense of the neediest. Carson said she was unaware of the 60 percent moderate income goal. "We should all be concerned about that proportion," she said. "I'm surprised, too."

Two other issues are driving the push for moderate income residents at Chatham Square. The federal government has been cutting funds to local housing authorities -- 7 percent for the current fiscal year with another 7 percent expected for the upcoming year. That pushes the authority to look for higher paying tenants in order to cover costs.

Plus, at Chatham Square, the developers will be charging condo fees, a cost that can rise quickly and unexpectedly, Ish said. So, higher income tenants are necessary for the housing authority to keep up with the fees.

"We know from past experience that condo fees do go up, sometimes dramatically. If I have public housing residents in there, I can't raise the rent; it's fixed at 30 percent of their adjusted income," Ish said. Since the overall housing budget is being cut back, the authority would have trouble paying. "That's why we need higher-rent tenants."

Chatham Square is one of the city's first so-called Hope VI housing projects, paid for with a complicated mixture of federal, local and private funds and grants. The federal plan was designed to demolish dilapidated public housing, like the 1940s-era Berg, and reduce concentrations of poverty by replacing it with new mixed-income communities as well as providing education and job training for residents.

Under Hope VI guidelines, public housing tenants whose units were torn down are supposed to get first dibs on the new units. For the 80-some families who were living at the Berg just before it was bulldozed, Ish said only 25 have said they want to come back. Others have requested one of the 48 new homes that will be built on three different sites on Alexandria's west end that are meant to replace the remaining Berg units.

Harold Napper, 52, who lived at the Berg for a decade and raised his daughter there after a work-related back injury kept him out of the workforce, said he doesn't want to go back. He wouldn't feel comfortable living next to millionaires, he said.

But his big complaint is that the Hope VI project was supposed to help residents. He argues that it didn't. "Rather than decreasing poverty on site, all they did was move poverty around," he said.

Ish disagrees. Twenty-two residents found work for the moving company when residents moved, she said. Ten former residents are currently working construction on the site and another eight found construction work through the project. The authority hired four residents and 24 are either in training, have graduated or are awaiting classes to begin in computers or nursing.

Richard Storms, another longtime Berg resident, now lives in a small townhouse plastered with plans and proposals for Chatham Square in a public housing development on Route 1. He, too, says he will not be going back to a place he once called home.

Unlike at the Berg, residents at Chatham Square, like those at many other public housing sites, will have to pay their own utilities. Although the city does give a break on rent in the form of a utility credit, Storms said he just won't be able to make it.

"Everyone has a right to live somewhere. Firefighters. Policemen. Lawyers. But the whole thing was supposed to be for the residents. Those were the ones who were supposed to go back. Not these high-paying ones who make $40,000 a year," he said bitterly. "This is my home now," he said, gesturing around the small room with linoleum-tiled floor.

Carson, of Housing Action, is pragmatic.

"I think it would be wonderful if all the public housing were for the people in most need, and there are people in public housing who are extremely needy," she said. "But until there is more money to help local housing authorities fund these projects, this displacement is probably going to be happening more and more."