SPENCER MICHELS: In a little-visited part of San Francisco, hard by the Southern City limits, Geneva Towers rises above Visitation Valley. Built privately in the 60's as housing for airport workers, the developer soon realized he couldn't rent the twin 19-story towers to middle class tenants, so he turned the building into low-income housing and obtained federal mortgage insurance designed for that purpose. Geneva Towers soon became a ghetto for the poor. Nice at first, it deteriorated quickly. Souriya Johnson moved in with her mother 25 years ago.

SOURIYA JOHNSON: Noise, crime, drugs, fighting. Put it this way. When you left in the morning, you, you were gone all day, and you came home and you were in your house and you locked the door, and you didn't want to have anything to do with whatever was going on outside your door.

SPENCER MICHELS: Inside, elevators often didn't work, causing 20-minute waits. The plumbing was dreadful. Heat was spotty, electricity sometimes shutdown.

MAN: You're going to have a new room to take care of temporarily.

SPENCER MICHELS: Johnson has her own two children today, and they were among the last residents to move out of Geneva Towers. HUD, The Department of Housing & Urban Development, which insured the mortgage, took over the building in 1991 because of the poor conditions, the first time the Department had ever done that. Major improvements were made, but now the government is preparing to tear it down. Local HUD Director Art Agnos is a former San Francisco Mayor.

ART AGNOS, HUD Director, San Francisco: Over the last three and a half years or so, we've had to spend an average of $600,000 a month to make this safe and secure, not to mention over $6 million just to bring it up to a habitable standard. We simply can't afford to do that for this building and, therefore, we made the tough decision, in cooperation with the people who live here, to tear it down and rebuild the kinds of units that really would be appropriate for the people who live here, as well as the neighborhood.

SPENCER MICHELS: HUD and the city decided to replace both buildings with low-rise housing, provided a non-profit developer can find a way to finance it. More homes for low-income tenants are planned across the street from the Towers. Former residents will have first crack at them.

SPOKESPERSON: This fence is a new fence. It was put in by HUD after they took up. Prior to the fence going in, there was a fair amount of drug dealing from this building to the building several blocks away.

SPENCER MICHELS: Ted Dienstfrey directs the mayor's Housing Office, which is working with HUD to relocate Geneva Towers' tenants.

TED DIENSTFREY, San Francisco Housing Director: This housing does not fit into the neighborhood as it currently stands and has caused all types of problems. It has isolated the residents in the buildings.

SPENCER MICHELS: But no one is sure how long it will take to build new housing or if federal money and other incentives to build low-cost housing will still be available. So the top priority has been moving two to three thousand people out . HUD is spending up to $3,000 per resident in relocation, finding new homes and promising to pay most of the rent with federal vouchers.

ART AGNOS: We just got in under the wire with existing funds that are locked away in the bank that can't be taken away by any Congress. We can't do what we saw in the 50's, where neighborhoods were bulldozed by the federal government and people just told to get out.

SPENCER MICHELS: In fact, the federal government has even paid for taxis for residents and relocation workers as they searched for replacement housing. While a few residents protested the demolition plans as an attack on the black community, most others appear satisfied with what the city and HUD are doing.

SOURIYA JOHNSON: That was a positive move for them to provide the cabs, to provide people whose job eight hours a day is to find you some place to live, some place acceptable where, and some place where you're comfortable.

SPENCER MICHELS: Why do you need this kind of help?

SOURIYA JOHNSON: Well, everybody needs help sometime or another. You know, you can't play super woman all the time.

SPENCER MICHELS: Finding a new place was difficult, but with the help of relocation workers, the family finally found a pleasant townhouse to rent within sight of the doomed Geneva Towers. The demolition plans mean a loss of jobs for 103 maintenance workers in a community where jobs are scarce. Many of them lived at Geneva Towers, including 25-year-old Stephanie Burch, who was making $15 an hour. Until she finds another job, she will require more subsidy from HUD to pay rent at a new rental home she has found with a San Francisco Bay view. Stephanie grew up in the Towers with her mother, Linda, and her sisters and brother. She now has three children of her own. At Geneva Towers, she didn't have to worry about paying for garbage collection, water, or electricity, so she has mixed emotions about leaving, although she likes her new home.

STEPHANIE BURCH: I like the place. I like the view. I like my neighbors. I was spoiled at Geneva Towers, and now it's like teaching me better. Geneva Towers, we were in our own little world. Now we're, we're hitting the real world.

SPENCER MICHELS: Even with a HUD voucher, called a Section 8, to pay most of her rent, Stephanie Burch had a hard time finding a place.

STEPHANIE BURCH: A lot of people do not want to rent to people on Section 8. They, they say that they tear their places up. They don't like people with Section 8. They don't like--they don't want anyone in their house with low income.

SPENCER MICHELS: Stephanie was happy to find a sympathetic landlord. In her new townhouse, she currently pays $457 of her $1100 a month rent, about normal in high-cost San Francisco.

TED DIENSTFREY: We're an enormously generous society, which is something we should all be pleased about, that we continually try to find ways to assist people who have not been able to yet join the economic mainstream of the society.

SPENCER MICHELS: Dienstfrey believes the big federal and city effort being made here is an experiment.

TED DIENSTFREY: We're also committed to trying to coordinate the housing with social services and job training, so that--to see whether we're clever enough or imaginative enough to improve the social and economic conditions of the whole neighborhood.

SPENCER MICHELS: Housing replacement is only one part of the plan. Geneva Towers was a community center, as well as a living space. Children at Geneva Towers heavily attended a recreation room on the premise, with a senior center in an adjacent room. Classes in dance were held on the first floor next to a health center for the residents. The Towers served as a distribution point for free food every month, and in the fenced-in field next to the building, coaches tried to teach sports skills and raise youngsters' self-esteem. With the Towers gone, a nearby housing project, Sunnydale, which is in horrible condition, has what few social services are available in Visitation Valley. Officials admit it is a needy and neglected part of San Francisco. Now, the city has allocated $600,000 to move many of those services to this empty building and add more in an attempt to unite and serve the community that is left.

ANTHONY LINCOLN, San Francisco Housing Official: (talking to children outside) Now, I'm giving you this because you're going to work hard in school, right?

SPENCER MICHELS: Anthony Lincoln, who grew up poor in Sunnydale, is coordinating those efforts. He sees something positive coming from the demolition.

ANTHONY LINCOLN: What's nice about it coming down is that I think that it's going to bring many different facets of this community together, and, you know, something that actually is a tragedy in terms of coming down, now we're looking at bringing the community together to talk about what's going to come in place of that, and I think that's a positive.

SPENCER MICHELS: Another goal of the city is to break up the large concentration of very poor people, according to Ted Dienstfrey.

TED DIENSTFREY: If we rebuild housing on this site and on the site across the street, we will not have economic segregation, we will have a mixture of very low-income houses and moderate income households.

SPENCER MICHELS: But whether all those plans ever come to fruition depends upon financing and that depends upon Congress.

TED DIENSTFREY: The future is not clear. We don't know what Congress wants to do, and we have not really convinced the majority of the voters in this country that we can do the job well.

SPENCER MICHELS: Geneva Tower residents like Souriya Johnson trust that things will work out.

SOURIYA JOHNSON: This is a growing thing. It's a growing thing for me. It's a growing thing for my children. We've had our rough times, our good times, and our bad times, but this is a good time, and I want it to continue to be a good time.

SPENCER MICHELS: City and HUD officials are optimistic also that despite the mood in Congress, they will find the money to rebuild and revitalize this neighborhood.

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