"We bought the building originally," Philadelphia real estate developer Morris Milgram said recently, "to show other investors that racially integrated properties like the Highlands could be bought, maintained, and profitable. It was a matter of both principle and business, and we proved our point: it was successful."

Milgram was speaking of the Highland Apartments, located at 1914 Connecticut Ave. NW. A member of the limited partnership that has owner the building for the last 13 years. Milgram recently sold the Highlands for $1.3 million to another limited partnership headed by local banker Leo Bernstein.

The new owners plan to turn the 146-unit Highlands into an apartment hotel, thus removing another large building from the city's tight and dwindling stock of rental housing within range of the middle class.

Up and down Connecuticut Avenue and in other parts of the city, particularly in Northwest Washington, tenants who have sometimes lived in the same apartment for 20 years or more abruptly told to move.

The buildings are then converted to condominiums, cooperatives or apartment hotels because, landlords say, the city's strict rent control laws make rental apartment buildings like the Highland undesirable investments.

"In the last few years," Milgram said, "we stopped getting distribution on our investment. And the rent control laws, as they are now, prevented us from raising rents sufficiently to ease the cash-flow problems we found ourselves in."

Bernstein said he plans to renovate and remodel the Highlands before converting it into an apartment hotel. "Washington is a city of international visitors," he said, "and can well use attractive apartment-hotel facilities, especially in the tourism area of Connecticut Avenue.

"After it is renovated, the building will be a distinctive addition to the city and neighborhood," Bernstein said. The Highlands is located almost directly across Connecticut Avenue from the Washington Hilton hotel.

Tenants at the Highlands have known for several months that the building was in the process of being sold. They received evistion notices on July 5.

The building's 146 apartments are filled with a wide diversity of tenants - from waiters to carpenters, lawyers to cooks, blacks to whites, Egyptians to Jews. All now share a common dilemma: they must quickly find other places to live.

In apartment 810, Vanessa de Saint-Blanquat, an administrative assistant in a D.C. architectural firm, is worried but unalarmed by her suddenly urgent need to search for housing.

Born in France and raised in South America, she has lived in Washington for the last 12 years. She looks out the living room window of the one-bedroom unit she shares with Alyssa, her 12 year-old daughter, and says that she will miss the Highlands.

"It's a charming place," she says, looking east over streets and rooftops of the city. "I'll probably never find anothe building with a view like like this. Even though the paint's peeling off outside and the wallpaper in the hallways isn't quite glued anymore, for the $195 I paid I really got my money's worth.

"I like living downtown," she says, "and I'll miss the mixed community here. There really aren't many buildings like this in the city."

In 316, Carlos Valdez, an administrative official in the Brazilian embassy who came to Washington from Brasilia five years ago, puts his infant son to bed in a crib in the living room of his small, one-bedroom apartment.

"It's almost impossible," he said the other day about his search for housing. "When I found this apartment two years ago it was just me and my wife. Now I have a child, and most apartment buildins in town won't admit new tenants who have children - dogs or cats maybe - but not children. Americans seem to like pets better than they do kids."

Valdez says he has "looked hard" for an apartment in the $160 price range he pays at the Highlands, but says the only one he could find was located in Silver Spring.

An 84-year-old tenant who asked that her name not be used said she is "very unhappy" over her eviction. Serving coffee while seated next to her street-level window, she said the Highlands has been ideal for someone, like herself, trying to live on a fixed income.

"There are becoming fewer and fewer places to live," she said, "here old people can have access to things like stores and churches without having to go very far and paying a mint for rent. You can live here on a pension and still survive.

"More importantly," she said, "I'm not lonely here. This is the kind of building where you can just sit in the lobby and meet all kinds of fascinating people from all over the world."

She says she has found, with the help of her daughter, another apartment a few miles away, but admits that rent there will be more than twice the amount she paid at the Highlands.

"I can't afford it," she said, "But I probably won't be around much longer anyway."

Some tenants, like Sigmund Karchem in apartment 801, are fighting the eviction. Along with 39 other tenants. Karchem, a capenter, has formed the Highlands Tenants Association, which has retained a lawyer in an attempt to push back the Sept. 30 deadline for eviction and to contest the eviction itself.

"This is not a high-class building," Karchem said of the Highlands, "and it's not kept up that way. But we like it here and it's cheap - no one is paying over $250 for rent."

Pointing at his Xeroxed copy of the eviction notice that was received by everyone in the building several weeks ago, he says "we weren't treated as people in the eviction process, but as numbers on apartments. It was unfair and inhuman and came out of the blue to everyone.

"There's a feeling of helpeness in the building," Karchem said. "Even though you reside somewhere for years and years and call it home, it's really not yours. The haves can always come and take it away."

Downstairs in the lobby, opposite rows of mail slots labeled with names like Wong, Montecino, Husein, McShay, and Leavitt, Mark Newland, vice president of the corporation that now owns the Highlands, disputes Karchem's claim that the process of eviction was "inhuman."

"I've had very few complaints from the tenants," Newland said, "except for a few diehards. To help in relocating them, we're posting notices in the lobby of vacancies in nearby buildings."

Describing the renovation work in store for the Highlands, he said: "It's going to be monstrous. We're going to spend over a million putting in a restaurant on the ground floor, remodeling the lobby, installing new elevators, and refurnishing the apartments.

"It's always a nasty business to have to evict people," Newland said, "especially from the Highlands. This was a wonderful place to live under rent control."