Facing mounting financial woes as it confronts aging housing stock, litigation, and budget and staffing problems, the Housing Authority of the City of Annapolis will receive a $3.3 million bailout from city, state and Anne Arundel County partners.

Officials hope the money will help the nearly 90-year-old agency turn the page on a sour chapter that brought it to the brink of failure.

More than 100 of the housing authority’s nearly 800 units are unoccupied, due to revenue challenges and a history of code violations that rendered many of them uninhabitable, Anne Arundel County Executive Steuart Pittman said at a Monday morning news event.

The bailout comes as the authority has been mired in litigation with the City of Annapolis over residents’ health and wellness and access to fair housing while living in HACA properties. In lawsuits, the city and HACA have squabbled over how they should share liability.

In 2020, the city and the housing authority settled a lawsuit filed by about 50 residents who alleged unsafe living conditions in HACA properties, problems exacerbated by a lack of inspections. A federal judge certified a related class-action lawsuit against the city in 2023, extending the original claims to cover about 1,700 residents served by the authority.

In separate litigation, Annapolis asked a judge to hold the housing authority liable, too, and consider placing it into receivership.

On Monday, representatives of the city and the housing authority said they are attempting to bury the hatchet.

Upon receipt of the new funding, HACA will commit to a 12-month plan to renovate and refill the vacant units. They said they also expected to enter mediation to settle their differences.

The $3.3 million, committed from state government sources, county COVID-19 pandemic relief aid and additional funds from the city, would reconcile the operating deficit, address needed repairs, relicense the empty units and improve the agency’s financial footing, speakers said at Monday’s event.

Maryland Housing Secretary Jake Day said the state award acknowledges HACA’s need had risen to a level that may exceed “any other project in the state,” given housing affordability challenges and supply shortages in Annapolis and statewide.

“We can’t always look to the federal government,” said Day, referring to deep-blue Maryland’s sometimes contentious relationship with the White House under President Donald Trump. “The fight just got a lot harder.”

The funding agreement, made possible with help from Rep. Sarah Elfreth, the area’s newly elected Democratic congresswoman who helped bring the parties together, came to fruition after nearly a year of meetings, a third-party review by a consultant and tough conversations. Elfreth said the situation served as a critical reminder that as tensions continue to rise at the federal level, Maryland leaders can resist by “pulling in the same direction” and remembering that better serving constituents “is not a competition.”

In an interview, Melissa Maddox Evans, the housing authority’s CEO and executive director, said she looked forward to resolving the ongoing litigation so the organization could refocus on its mission.

Mediation should have happened “yesterday,” she quipped, acknowledging that the extended legal battles had not made anything easier.

The agency’s future is bright, she told a small crowd gathered at HACA’s offices Monday. In addition to preparing to convert some housing authority properties to private management, the housing authority won a competitive federal grant to redevelop two properties, Eastport Terrace and Harbour House, into mixed-use properties with affordable and market-rate housing that could help the organization pull in much-needed revenue.

Annapolis Mayor Gavin Buckley said Monday that once completed, those projects could be a model for future public housing development around the nation.

“Our housing will be some of the best in the country, because it will be in an amazing spot like this,” Buckley said. “I’m excited to sit on someone’s balcony when it gets done, look out at this amazing place that we live in, and get to know it’s not just for millionaires to enjoy that.”

HACA board member Jacqueline Wells, who’s lived in a housing authority property for more than 20 years, said she felt relieved after Monday’s funding announcement.

Wells said she hopes the organization can reset and provide residents with an improved quality of life. She and other board members and residents have been hard at work advocating for one another, she said, and praying for resolution.

“We have been through some things,” Wells said. “It’s time, it’s time.”