CHATTANOOGA, TENN. -- This is the third in a series of columns on the country's low-income housing crisis.

CHATTANOOGA, Tenn. -- Is it conceivable that a city can transform its slums, making all its housing "fit and livable" within a decade?

No major American city has even tried. But James W. Rouse, former shopping-center developer and founder of the Enterprise Foundation that provides housing for "the poorest of the poor," believes it's possible.

So does Chattanooga's mayor, Gene Roberts. And so do a coterie of determined community leaders in this old Tennessee industrial town. They believe they have a plan in place to make it happen.

Predictably, such grand ambition finds skeptics. One is Billy Cooper, veteran chief of Chattanooga's public-housing authority. The idea of stamping out substandard housing, says Cooper, is admirable but unrealistic: Given the way many low-income tenants treat property, units rehabilitated early in the decade "would be dilapidated" by its end.

Rouse, however, has little patience for doubters. He recalls that back in the early '70s, when he decided to build his first "festival marketplace" at Boston's Faneuil Hall, bankers scoffed, and he had to go out of town for financing. Yet within a few years Rouse's festival marketplaces, and their imitators, were rejuvenating center cities across the country.

Rouse's covisionaries for a slum-free Chattanooga include Bob Corker, a youthful local developer of shopping malls. Corker conceived the idea of a big housing turnaround and inspired, in turn, Rick Montague, leader of the Lyndhurst Foundation, one of Chattanooga's strong philanthropies. Montague approached Rouse, who was already casting about for a city willing to tackle its substandard housing problem in toto.

The Enterprise Foundation wrote Chattanooga's preliminary plan last summer. The work began with a survey showing the city has 13,000 substandard homes, a pervasive pattern of deterioration and abandonment, and a zero vacancy rate in low income housing.

Repairing all that's substandard might cost $200 million, Enterprise calculated. To get a start, it proposed a two-year repair and replacement program of 395 units, costing $4 million. And to give the long-term recovery plan a chance, the foundation said, Chattanooga needs systematic housing-code enforcement and a vigorous program to train homeowners and renters in maintenance and repair.

Enterprise suggested a superagency to coordinate the whole job -- a nonprofit corporation to be called Chattanooga Neighborhoods Inc. CNI is now up and running, its board made up of civic leaders committed to the effort.

The CNI design resembles Charles Center-Inner Harbor Management Corp., the private body, acting for and with the guidance of city government, that made possible much of the stunning redevelopment in Rouse's home city of Baltimore. A critical breakthrough, says local civic leader Mai Bell Hurley, came when Roberts agreed to turning major responsibilities -- housing code enforcement included -- over to CNI.

Chattanooga lacks the massive slums of a Chicago, Philadelphia or St. Louis. But a quick tour of the city reveals pockets of deep deprivation: old, broken-down houses, some little more than hovels, many boarded up.

Raising money to rehabilitate all that will be tough enough. It will have to come, Enterprise calculates, from every level of government, from grants, bonds and syndications, benevolent loan funds, concessionary loans from banks, corporate and foundation gifts.

Says Montague: "We'll have to go to all sorts of people -- including upper-middle-class Republican voters, old-line liberal Democrats who say let government do it all, people who go to fundamentalist Christian churches -- and involve them all in the lives of people of poor neighborhoods."

One has to gasp at the audacity of that strategy. Private philanthropy, usually reserved for education, hospitals, the Red Cross and Girl Scouts, has rarely scratched the housing problems of any American city.

Roberts acknowledges that "the dream includes lots of components," few of which are yet in place. "It may take a lifetime rather than 10 years to make it." But he insists: "The commitment has been made; we'll get it done."

But will housing alone answer Chattanooga's problem? There comes the rub. The root problem isn't housing, it's poverty, and the need to tackle every problem from joblessness to school dropouts to teen-age pregnancy.

The good news is that the sponsors know it: "If we did 13,000 houses and just walked away, it would be a miserable failure," one told me.

Rouse acknowledges the Chattanooga housing program is experimental: "The answers on how to do this in 10 years do not now exist. But I've always had the conviction that if cities will take on the whole job, it's a lot easier than doing part. If we can get this program advancing on schedule, we will have built a structure that will change housing for the poor in America. It will be a lighthouse for other cities to follow."

From another leader, I might mark that down as hyperbole. But given his track record, not Jim Rouse.