After receiving sole custody of his daughter last year, Tyrone Brown turned to Habitat for Humanity to help him buy a home where his 6-year-old could grow up and put down roots.

"It was my top priority," said the 45-year-old Annapolis garbage collector, who moves with his daughter this month into his newly renovated townhouse on Clay Street.

But there was a tradeoff. Buying an affordable home meant being part of the latest attempt to revitalize a neighborhood stricken for decades by poverty and crime. It will also mean raising his daughter just steps from two of the nation's oldest public housing projects, which at night become open-air drug markets, police say.

Brown hopes that he and other new homeowners on the street -- including a dozen others who purchased through Arundel Habitat for Humanity -- will help restore an area that long ago was known as a vibrant community where working-class blacks lived, ran businesses and, most importantly, raised families.

"It's already happening," said Brown. "People come up to me and see my house and say, 'How did you get that, and how can I do it?' "

Brown's home is one of many in the Clay Street area that have been made over, in some cases completely rebuilt, through government grants and nonprofit organizations such as Habitat for Humanity and Homes for America. The area's incremental facelift is the most palpable evidence of its revitalization program, begun nearly 10 years ago to turn back the negative effects of the early 1970s' urban renewal programs and the introduction of crack cocaine in the '80s.

Clay Street's small size -- running less than a half-mile from end to end -- seems incongruous with the magnitude of the problem the city has faced in bringing prosperity to the predominantly black neighborhood. Walled off by a mammoth parking garage and government buildings, the area lies hidden from the pristine Georgian and Colonial neighborhoods just blocks away that are visited each year by thousands of sightseers touring Maryland's capital and the city's historic district.

Newcomers to the city are often unaware the Clay Street neighborhood exists unless they make a wrong turn on their way to the upscale pubs and shops that line West Street.

"It's in the shadow of the state capitol, yet I'd say 90 percent of white Annapolitans never see it," said former city alderman Carl O. Snowden, now an aide to Anne Arundel County Executive Janet S. Owens.

A half-block from Clay Street, the Stanton Community Center offers a sense of what the neighborhood once was. A mural on the south wall depicts a lively nightclub scene from the 1940s with portraits of Billie Holliday, Duke Ellington and other black entertainers who once performed here.

"When black sailors came into town, this is where they came," said Kirby McKinney, the Stanton Center's executive director. "It had nightclubs, a movie theater -- black people from all over the county used to come here just to watch a movie. I couldn't wait to grow up here and get my turn, but by the time I did, it was all torn down."

Today, just a few steps to the right of the mural, the center's side door offers a glimpse of what the area has become. On it, in a tight grouping, are five newly embedded bullet holes.

"Target practice," lamented McKinney. "You just can't change a neighborhood by making the buildings look good."

People here have long blamed the neighborhood's decline on an urban renewal effort in the early 1970s that replaced homes and businesses with office buildings and parking garages. The old Star Theater is now an asphalt lot.

By then, though, the area was already considered by many to be a slum, run down by a variety of economic forces. Even integration played a role, said McKinney, as small, black-owned mom and pop businesses succumbed to larger white-owned retailers with economies of scale on their side.

In 1994, Mayor Alfred A. Hopkins established the Clay Street Revitalization Committee to begin addressing the problems. The committee, of which McKinney was an original co-chairman, grew out of a grass-roots movement of neighborhood residents led by Bertina Nick, a fiery, imposing activist who died last year.

The committee focused on making the streets safer and attractive, putting people in their own homes, and providing job training and family support services.

The effort got a boost in 2002 when the city's Planning and Zoning Department tapped a new source of support: the state's Community Legacy Program, whose grants are aimed at turning around neighborhoods on the brink of decline. Since then, the program has provided about $1 million in grants and loans, a large chunk of that going toward refurbishing homes and helping people buy them through partnerships with Habitat for Humanity and Homes for America, said Theresa Wellman, the city's chief of community development.

Nearly 40 homes in the neighborhood have received or are undergoing some level of renovation -- from facade improvements to total rebuilding.

A walk down Clay Street reveals sign after sign that change is underway. Narrow row houses that once were abandoned or uninhabitable -- serving instead as meeting places for crack dealers and users -- are now tidy homes covered in bright pastel siding and ornamented with flower boxes. Improved lighting, fencing and other security improvements have been installed at Obery Court and College Creek Terrace, the neighborhood's two public housing projects.

West Washington Street, which serves as a gateway to the neighborhood from bustling West Street, has newly brick-lined sidewalks and decorative street lamps.

At the west end of Clay Street, private developers are buying up homes and young couples have moved in, banking on the neighborhood's future.

Some longtime homeowners are also taking the gamble. When Stanley Carroll and his wife thought about selling their Clay Street home, they looked at some of the changes taking place and at the area's potential. The neighborhood runs along College Creek, giving it a proximity to water that in any other Anne Arundel County neighborhood would add considerably more to property values. And on nearby West Street, Park Place -- a $200 million office, retail and luxury condominium project -- is scheduled to open by 2007.

"In the end," Carroll said, "we decided to do some home improvement, so that if and when the value goes up, it's going to be substantial."

But the risks are also substantial. For all the improvements that have taken place, the Clay Street corridor, which includes portions of West Washington and Northwest streets, remains plagued by problems.

"What's happened in the past is you'd have abandoned houses, and people set up shop," said Annapolis police officer and spokesman Kevin Freeman. "You had open-air drug markets. Our drug units would patrol the area, but it's kind of hard when no one's there to help out with community support, because police can only do so much."

The neighborhood accounts for 30 percent of the calls police receive each year about suspicious drug activity, according to the Clay Street Public Safety Team, a community watch group that monitors three city housing projects.

Formed in 2002, the team estimates that over 50 percent of the residents are dependent, directly or indirectly, on the drug trade. "Some sell drugs, some use drugs and some are paid by drug dealers to use their homes to stash drugs and sell drugs," the team wrote in a grant request seeking funds this year.

Some children even earn money by running drugs, the team noted.

Many here believe the most important step in reducing crime is to reduce the number of public housing units.

"There are a number of us who live on Clay Street who want life to improve, and the only way to improve is to get a grip on these breeding grounds," said Jeff Henderson, president of the Greater Clay Street Community Development Corp., a nonprofit organization founded by the late Bertina Nick.

Earlier this year, some families turned down the chance to buy a Habitat home, feeling the neighborhood wasn't safe for young children.

Habitat has since found families for all its 12 homes on the street, and the visible signs of progress are attracting more. The Arundel chapter now has a waiting list of 30 families, many of whom want homes on Clay Street, Habitat officials said.

Police spokesman Freeman calls it a harbinger of hope.

"People are buying houses and they'll start to develop neighborhood pride, and that will reduce crime," he said.

Denise Williams, a 38-year-old nursing assistant for the elderly and a mother of three, was a longtime renter on the street until she had a chance to buy a Habitat home. Sitting in her living room recently, she spoke about what having a home will mean for her children.

"I plan to be here a long, long time and then give it to my kids," she said. "Whatever happens, this family will always have a home. I don't think my family ever had that when I was growing up."

Two doors down, 6-year-old Tyjah Brown clomped up the steps of her and her daddy's new home, just days before they were to move in. Inside, she stopped in what would be her new bedroom and pondered a decorative theme for the blank walls: "Maybe Barbie," she said tentatively.

For Tyrone Brown, who has been sharing a crowded house with his sister's family, watching his daughter contemplate personal space was a dream come true.

To qualify for a Habitat home, candidates must earn between $17,000 and $34,000 a year; put in up to 400 "sweat equity" hours working on their own houses or other Habitat houses, and purchase their Habitat house through no-profit, no-interest loans.

In Brown's determination -- he calls it "desperation" -- to buy a home, he sprinted off to Habitat sites after his regular work shifts and on weekends, completing the sweat equity requirement in the half the normal time.

"A house is a solid foundation," he said. "Everything should start at the home, spiritually, physically, mentally -- I want that for my daughter. It's time for her to say she's got something."

In June, Habit for Humanity celebrated its 700th Maryland home, on Clay Street in Annapolis, above, with a ribbon-cutting. At left, a new Clay Street homeowner, Terry Morgan, speaks with County Executive Janet S. Owens at the gathering.Tyrone Brown, above, and other new homeowners on Clay Street in Annapolis are part of government and private efforts to revitalize the area. Tyrone Brown and daughter Tyjah, 6, in their new Clay Street home, which Brown purchased through Arundel Habitat for Humanity.