The cops thought she was crazy. Here was this girlie, carrying top-of-the-range photographic equipment, wandering around Dublin's north inner city taking pictures of houses. Artist Esther Shalev-Gerz is moving houses and shifting perceptions in Dublin's inner city, she tells Arminta Wallace.

If she wasn't crazy, she was clearly driven: a digital burglar of some sort, maybe? Or an unusually prescient estate agent, getting ready for the day when the area might "come up?" But no.

Invited to Dublin by the Fire Station Artists' Studios to make an installation in a part of the city in which snazzy high-rise offices are cheek-by-jowl with deprivation and neglect, the artist Esther Shalev-Gerz decided to familiarise herself with the area, at least initially, by photographing it. And a good job, too: by the time she returned to get seriously stuck into the project, many of the buildings in question had been demolished.

She knew then what her subject would be. She would photograph houses and project them on to the walls of neighbouring houses and sometimes into neighbouring streets, creating a maze of shifting certainties. The giant images will be projected for a month, and will pulse slowly from red to black-and-white and back again. "So I hope that the people who live in the neighbourhood will not be bored," she says.

Night-time projections, Shalev-Gerz adds, hold a particular appeal for both artist and audience. "Night is a very magical time. It gives you dreams. The images stay in your head. And the framing becomes very obvious - suddenly you don't know if the house is far away or close. It's a very interesting medium for the artist to work with." Maps with suggested routes will be available, although as the title of the project, Daedal\ - with its nods to Joyce and Greek myth - suggests, anyone can just come and have a wander around at their leisure.

Born in Vilnius in 1948, Shalev-Gerz has worked and studied in Jerusalem, Berlin and Stockholm. She spent a year in New York, but has lived in Paris for almost 20 years, which gives her articulate English a slightly French flavour. Small, dark and energetic, she has created a varied body of work on implicitly and explicitly political themes. Her 1997 exhibition Increments on Stone consisted of 16 negative photographs on aluminium; close-ups of fragments of rubble which were then crumpled, giving a three-dimensional, stone-like effect. Another project, Reasons for Smiles, asked people to think of something which made them smile, photograph themselves smiling, then send her the undeveloped film. One of her most controversial ideas was the erection of a lead-covered column in a German town square along with an invitation to passers-by to write on its surface.

As the surface became covered with writing - "insults, graffiti, tributes" - the column was gradually lowered into the ground.

When the curator of the Fire Station, Brigid Harte, saw an installation Shalev-Gerz had made in an immigrant suburb of Paris called The Portraits of Stories, she felt the artist's work was particularly relevant to an urban area undergoing massive transformation. Like Dedal\, the work explored themes of power, significance and memory, asking 65 people what they wanted to talk about on any given day.

Shalev-Gerz says her own preconceptions about so-called urban deprivation were seriously challenged by what people told her during the 12 months she spent working on the piece.

"I said, 'You are free to tell me what you want. You can tell me your life story, his life story, you can invent, you can lie, you can imagine - you decide'. One person said to me, 'Look; I've been sitting here watching this wall for three weeks now. So film the wall'."

How did Shalev-Gerz get to grips with Dublin's north inner city? "First I came for a visit and was given a tour by local folklore historian Terry Fagan, who knows all about its history and folklore," she says. "It was a very human, embracing introduction which revealed many of the layers of what happened here in the past and what is going on now. For example, the biggest bordello in Europe was situated here. As a woman, when you hear about 1,300 prostitutes working in an area it . . . moves you a little bit," she says, with a wry grin. But, she adds, "it wasn't just that I walked in and 'did' a project. Many, many people worked for it to happen", most importantly, of course, the people who live in the area.

"When I photograph a building, the owner of the building has to give his permission; the owner of the building it is projected on to has to give his permission; and the person who will host the projector has to give permission. So for each projection I'll have to talk to three families to get permission."

Did anybody in this notoriously tough part of Dublin refuse to co-operate? "Of course," says Shalev-Gerz with a shrug. "But for me it's very important to talk to people, because the project is about permission, so actually a No and a Yes have the same value. If they say No, usually it's because the place is too small - it's a pretty big projector, and it's on for five hours every day, so I understand that if it's possible they take it, and if not . . ."

Shalev-Gerz's sympathy for the underdog combines with her astute understanding of socio-political realities to give her work an extraordinary breadth of appeal. Dedal\ is about displacement and empowerment - but also, at another level, about personal living space.

"It's about recognition, reclaiming, remembering. It's about creating nostalgia. I wanted it to move. I mean, a house doesn't move, I know. But I wanted to create something that does move by moving houses into neighbouring streets. It's about a broad understanding of the ritual that our society calls art, and about whom we include or exclude."

She also hopes Dedal\ will lead to a wider exchange of views between various Dublin "tribes".

"For me this project has two legs," she says. "One leg is the projections, and then the second leg is inviting all of Dublin to come and visit the north inner city and to walk the maze with us. And the next thing I would like is to take those images and make an exhibition of them in one of the galleries on the south side of the city, where the north inner city people can come and see the images of their buildings." This would be more than usually appropriate because as a working artist, says Shalev-Gerz, she has found Ireland - including north inner-city Dublin - to be a very inclusive place. Expensive equipment or not, she didn't get bashed up or attacked or abused in any way - despite several friendly warnings called from passing Garda cars.

"People talk to you here," she says. "When I ask for directions, I get whole conversations. During the summer I was watching people bathing, and a woman came up to me and started talking about her numb fingers and how her daughter was swimming there - and I heard her whole life. People share little moments with you and then go away. You don't owe them anything, they don't owe you anything.

"It's not like that in Paris. You live for 30 years in one house and you say, 'Bonjour, monsieur; bonjour, madame' and that's it. For 30 years." It would never happen in the north inner city, that's for sure.

Dedal\ opened yesterday. Maps of the exhibition trail will be available from the Fire Station Artists' Studios on Lower Buckingham Street., Dublin 1