Montgomery County is considering an innovative plan to rehabilitate the Grove Street area of East Silver Spring by purchasing the "spare backyards" of houses then selling the land to developers for construction of moderately priced town houses.

The plan seeks to avoid the long court battles that occur when the county acquires property by condemnation and the high costs that would be incurred if the county purchased the houses that are most in need of repair. Acquisition costs of that kind of urban renewal project in the Grove Street area are estimated to be at least $1.2 million while the proposal under consideration would cost the county an estimated $330,000, county planners say.

The plan was unveiled before about 35 property owners and residents at a public hearing and generated both praises and sharp criticism. Based on the testimony, a county hearing examiner will decide late this month whether the county can proceed.

The project area is bordered by the Silver Spring central business district on the west, Bonifant Avenue on the north, Grove Street on the east and Sligo Avenue on the south. It includes about 50 homes.

According to the office of community development, about 40 per cent of the houses in the area appear to "be either significantly deteriorated or dilapidated . . . Other symptoms of environmental blight throughout the area include overgrown lots and unkept yards . . . with a scattering of abandoned automobiles.

The office also says there are indications that land speculation had begun. The number of rental units exceeds the number of owner-occupied units and, although the area is supposed to remain residential, as was approved in the Silver Spring sector plan, there are several applications for rezoning properties for commercial use.

The purpose of the plan is to re-establish the area as an attractive residential neighborhood. Under it, the county would purchase at fair market price about 3.8 acres of land that is in excess of the 6,000 square feet per house that is mandated by zoning laws. An estimated 50 new housing units would be built on the property.

Planners say tha the current owners could use the money from the sale of part of their land to bring their homes up to building code standards. If the owners preferred to sell their entire lots, the county would entertain an option for purpose. The county would proceed to rehabilitate and then resell the buildings or sell the land contingent on rehabilitation by the purchaser.

At the public hearing, Manuel Auerback, of Silver Spring, who said he owned five houses in the project area, said the plan "speaks" of speculation and a lot of doubletalks."

Auerback said he spent $10,000 in maintenance last year on his properties and has a "constant monthly loss in operating and maintenance of $600 a month."

"You can't take these old houses and leave them and put new houses around them. It's just not going to work to have these new pretty houses in back and those old broken down houses in front. You can't improve this section without tearing them down," he said.

However, another man, who said he recently purchased "four of the worst houses" in the Grove Street area, said he is renovating his property and feels the plan could work. "I feel nothing is wrong with having a town house cluster situated with single family houses," he said. "I feel it is a workable plan and I would like to see it pursued."

Betsy Taylor and Walter Sittner, who both said they lived near the project area, praised the plan but criticized the planned sale of the town houses to persons of moderate income. Both argued that since Grove Street is within easy walking distance of the Metro Station planned for Silver Spring, property values in that area could rise above moderate income levels and the townhouses should be sold at market value.

Sittner said he feared the plan would result in "replacing a low-income slum with a high-income slum."

However, Dennis Couture, a planner with the office of community development, said the project would not be "an open door to low income or subsidized housing" because the town houses would probably sell for $51,000 to $52,000. The money for the land acquisition would come from county funds for housing for low-and moderate-income persons.

Couture estimated that if the hearing examiner approves the project, the town houses could be built in two to four years.