The state Housing and Community Development Corporation of Hawai'i, which oversees federal and state public housing projects, has made progress over the past year in correcting management problems and has been taken off the federal government's list of troubled housing agencies.

In a Nov. 4 letter to the corporation, Michael Flores, director of the local Office of Public Housing for the U.S. Department of Housing and Urban Development, said the corporation would still have to follow an improvement plan to meet the targets that it has failed to accomplish.

But he congratulated the state for its performance after years of management shortcomings.

Flores said HUD was satisfied the corporation had made "acceptable progress."

"We appreciate HUD's willingness to work with us to turn this agency around so that we can continue to focus on serving our residents who need public and assisted housing," Gov. Linda Lingle said yesterday in a statement.

The corporation said the state has reduced a list of 120 concerns down to 10 that still need work, which include shortening the time it takes to get housing units ready for new tenants, boosting rent collections and evicting problem tenants sooner.

The corporation had risked losing millions in federal housing money if it did not make the improvements the federal government had called for in September 2004 within a year.

In 2002, the federal government required the corporation to spend $2 million of its money on a management study and forced the resignations of its former executive director and most of the corporation's board of directors.

The corporation has been criticized for allowing units to deteriorate and for slow repair work that has left units vacant at a time when the state is struggling to provide affordable housing.

"It did take years to get into this state of disrepair, and I think it's just a huge thing for HCDCH to have turned this around within a year," said Stephanie Aveiro, the corporation's executive director.

The corporation oversees more than 5,350 federal housing units and more than 2,000 state units. It also helps nonprofit and private groups finance affordable housing.

"This is an important milestone for all of the staff who worked diligently over the past 12 months to address the deficiencies identified by HUD," Chuck Sted, the chairman of the corporation's board of directors, said in a statement.

Reach Derrick DePledge at ddepledge@honoluluadvertiser.com.