TWO REMODELED houses -- one the essence of an elegant New York townhouse, the other a hilarious spoof that looks like an abandoned tool shed -- won the 1980 American Institute of Architects honor awards, to be presented at the institute's convention in June. The houses are almost a definition of the difference between how people live on the East and the West Coasts.

The house Frank Gehry designed for his family in Santa Monica, Calif. (where else?) looks from the outside as though some energetic children had built it out of demolition-yard leftovers.

"It could never be built in Washington," said Gehry, who designed the Rouse headquarters building and the Merriweather Post Pavillion at Columbia (though he deplores the present condition of the Pavillion).

The house started out as an innocent-enough pink-shingled 1920's bungalow in a previously unremarkable but quiet neighborhood. "My wife went out and bought it," Gehry said. "She said, 'come see it' and I said, 'aw, go ahead.' Of course she knew I'd do something to it."

When he first saw the house, Gehry was fascinated by the idea of building a new house around the old one. "I wanted to keep the old house's identity." So he built the house a box to sit in out of galvanized metal siding, the sort of material from which warehouses and shacks are commonly made. He left the original pink shingle exterior alone, so when you open the new front door, you see the old front door and the old fascade. "I had a hard time the first week living with that," Gehry admitted. "But now I enjoy the changing reflections." The galvanized-metal facing extends beyond the house, propped up by 2-by-4s; to be a fence. Shades of Hollywood Westerns!

After he had finished the house, Gehry found a Magritte painting showing a huge house inside a room. "I didn't remember seeing it before, but I must have. I suppose it isn't bad to copy from Magritte."

The space between the old and the new houses is used as a foyer, dining room, kitchen and play space. The roof of the new addition serves as a deck for the second floor. Its wall is chainlink fencing of the kind commonly used to keep mean dogs in and burglars out.

The inside of the old house was torn out. Plaster was knocked off the walls to show the structure.

The kitchen and dining room are paved with rolled asphalt, like a driveway. Paul Lubowicki, who helped Gehry with the house, said that Gehry's wife thought that one up. He said she likes it fine except when it gets too hot and the furniture slowly sinks into the floor. Gehry said, "It's also soft to walk on, acoustically quiet and easy to clean -- parking lot clean, that is."

The skylight in the kitchen looks as though it had dropped from a flying saucer and landed askew. The greenhouse roof of the kitchen is to be covered with snow fencing to shade it.

Lubowicki said the neighbors "hated it at first. They used to shout at me." But now they just avert their eyes as they go past. Gehry said that now that the house has had so much publicity, some of the neighbors are proud of it and bring their friends to see it. "I'm a two-block hero to the children," he said.

"I worried a lot about the morality over what I was doing in the neighborhood, but there really isn't any unity to the architecture -- there's everything, Spanish, cottage, multi-family."

The Gehrys said the house really works for them. "It's a comfortable house," he said. "Ours is not precious, you can pound a nail in the wall wherever you want to." Robert A.M. Stern, who with John S. Hagmann designed the other house in Manhattan, said "Gehry's house is really charming."

The construction cost was $115,111 for the added $1,000 square feet.

Most of the controverey about the house stems from the two materials, the corrugated steel and the chain link fence. Gehry defended his use of the materials as his continuing fascination with experiments using the most ubiqutious industrial materials. (Several years ago, he designed and manufactured a collection of furniture made out of corrugation pasteboard that was inexpensive and good looking. He says now that he didn't continue with it because he wasn't interested in the business side.) "I hate chainlink too," he said. "People were always running my buildings by putting it up. But I wanted to see what could be done with these materials by using them in a sculptural way.

"I just wanted to build an honest building, not to upset people or change the course of architecture or start a new school."

Gehry has done several other houses using corrugated siding. But now, he said, "I'm finished with it and chainlink. I know as much as I want to about them. In the two houses I'm doing now, I'm trying two other ways of saving money. In one there are no walls, the furniture divides the space.In the other, each room is a separate house." As for his current house, "I'd like to sell it. I want to build my wife and the two boys another one."

The AIA judges apparently had a knock-down/dragout discussion over the house. Their statement said: "The jury was concerned that the solution was out of context with the immediate neighborhood, but this often happens with fresh ideas. The architecture is a study of materials and questions living patterns. The result is charming and unsettling, but rewarding."

The New York townhouse is, to put it mildly, something else. It is an exquisite urban residence, one of only three truly contemporary townhouses to be built in Manhattan within our times.

The 5,000-square-foot house sits bravely between two tall buildings on a major avenue of the town. The house and lot are one. The house sits right up to the sidewalk. The architect had to provide for interior space that would make up for the total lack of garden. "There's only a terrible service alley that no one would want to go into," Stern said.

From the outside, it has an unblinking formal face, despite the large glass wall on the second floor, with strong, cross muntins.What looks like a cylons helmet off "Battlestar Galactica" forms the cornice of the top floor, perhaps to defend itself from the taller buildings on either side.

The exterior brick is covered with cream stucco, "Like John Mash's houses in London," Stern said. "I'm sick of exposed brick walls and asparagus ferns, all left over from 1960s' restorations."

The street level, by request, has been changed very little. The doctor's office inside has nice old woodwork. He has the left door entrance. The family of five come in the other door.

The family chose the site because they really like to live in New York. "I think its encouraging," said Stern, "that people are rededicating themselves to the city." The wife works around the corner from the house; the husband, ironically, works in a suburb. Interestingly enough, more and more people are doing reverse commuting.

The garden of the house, or as John Wiebenson, another architect, likes to call it, the village green, the commons, the piazza green, is a four-story atrium. All the principal rooms open into the atrium. It's bonus space, used for the second table during big dinner parties and as a pleasant place to pass through.

The roof is a full story above the main house, to provide for clerestory windows, Stern's alternative to the skylight. It gives light without sight. "I think the view from a skylight might seem threatening with those high buildings on either side."

The three family floors have five bedrooms. The top floor has the master bedroom on the front, separated from two guest bedrooms by a roof deck.

The living room and dining room are on the second floor, the traditional piano nobile , an excellent solution to living in the city, away from street noises.

The cabinet work is another distinquishing feature of the house -- undulating walls, built-in storage, niches for display. "It's not difficult to find good craftsmen," Stern said. "There are plenty around, waiting to be asked to do something different and interesting.

The fireplace is framed in brass with a bowed surround striped with gold and yellow. The colors in the house are like creams from a candy box: yellow, pink, green, blue, russet, mauve. White becomes an accent color.

A cold cathode tube, another undulating shape, snakes across the ceiling of the entertaining floor.

The furnishings are soft leathers, comfortable and opulent.

The two houses is this year's AIA awards, the top professional honors of the year, tell a great deal about the state of architecture today. Punk on the West Coast, Jazz in New York.