In a ward that prides itself on its diversity, the need for low - and moderate-income housing has emerged as the dominant issue in the battle for the Ward 1 City Council seat.

Listen to the hustlers on 14th Street, the welfare mothers in Upper Cardozo. Sitting on the steps of crumbling rowhouses or leaning in the doorways of sagging tenements, they tell you:

"Rents are going up."

"The plumbing doesn't work."

"We need housing."

The Hispanos in the international community of Adams-Morgan echo the cry - no housing. They say 18th Street is becoming like Georgetown. A rowhouse shell sells for $100,000. Coops and condominums are springing up. Residents complain they're being forced to moved.

In Mount Pleasant and LeDroit Park, black and white homeowners in elegant Victorian mansions and decaying rowhouses gripe about equally high property taxes.

Four Democrats, including incumbent David A. Clarke, are campaigning by offering a variety of solutions to the housing problem. In addition to Clarke the other three Democrats are community organizer Frank Smith Jr., considered by some to be Clarke's strongest contender; Calvin O. Wingfield, a federal employe who ran for the Ward 1 seat in 1974, and Samuel B. Wallace IV, a declared welfare recipient who has been running a largely phantom campaign.

Two other candidates seeking the Ward 1 seat are: Socialist Workers Party candidate Antonio J. Grillo and U.S. Labor Party member Suzanne Klebe.

Ward 1, located in the central, Northwest sector of the city, is a study of new wealth and nondescript poverty.

In recent years the ward has become a hodgepodge of aging and newly renovated housing. Real estate speculation has contributed to the housing changes, which have replaced many low-income white and minority tenants with affluent white, and a few black, homeowners.

According to city statistics, about 88,300 people live in Ward 1, which is nearly 80 percent black. Included in the 20 percent white population is a sizable Latino community located mainly in the Adams-Morgan and Mount Pleasant areas. Area residents, however, contend that the white percentage is higher.

"My impression is that there are more (whites) than that," sais City Council member Clarke.

The majority of ward residents are tenants living in row and semi-detached houses.

In Adams-Morgan and Mount Pleasant, speculation is reflected by "for sale" signs dotting rows of 19th century rowhouses. Along lower Connecticut Avenue, fancy food and clothing shops and fortresses of elegant condominiums and cooperative apartment buildings reflects the affluence of the ward's major white enclave.

Poverty is reflected in areas like Upper Cardozo, a depressed, crime-ridden neighborhood of working-poor and welfare families, and the riot-scarred 14th Street Corridor, beset by vacant houses, a stagnant business area, widespread unemployment and heavy drug traffic.

In recent years, the city's longtime promise to rehabilitate 14th Street has culminated in government subsidized housing. Still, running along the corridor are 120 vacant structures representing 168 residential units and 19 other units.

In the Columbia Heights area east of 14th Street rowhouses have been purchased and restored mostly by whites.

Further east is Soldiers Home and the historic neighborhood of LeDroit Park.

Most of the housing issues discussed in the race have focused on Adams-Morgan and Mount Pleasant, two politically active precincts that can ensure votes, and perhaps an election - a political reality recognized by all four Democratic council candidates.

Incumbent Clarke, 34, has addressed the housing issue by pointing to his record, which includes legislation taxing real estate speculation profits and strong rent control measures. He has testified before Congress in support of a still-pending, $1 million plan to help poor families buy homes. He was also a major force behind the successful effort to have Seaton Street in Adams-Morhan declared a one-block community development area without diluting the 14th Street rehabilitation funds.

Smith, 35, a supporter of tenants rights organizations and of home ownership by the poor, is best known for his work in Adams-Morgan. He was chairman of the Adams-Morgan Organization (AMO), and he aided Seaton Street tenants in their fight to raise down payments money to purchase their homes, which were being threatened by speculators.

Smith advocates controls against redlining by banks, a stronger tax bill aimed at real estate speculators and a housing program to make available a variety or rental and owner-occupied housing.

Wingfield, 52, who lives near Upper Cardozo, supports strong rent control measures, refurbishing vacant and decayed housing for low-income persons and community courses to teach residents how to care for their homes. He also supports education reforms such as recertifying teachers at regular intervals, community reading programs and subsidized mental health programs for youth with learning problems.

"Most of the Democrats on the city council have sold out to the Board of Trade and D.C. Chamber of Commerce," said Grillo, 31. If elected he said he would help to expose political corruption in the city, collect delinquent property taxes from businesses, and enact new rent reforms.

He also supports hiring undocumented workers, and raising unemployment compensation payments.

Klebe, 25, supports expanding industrial development particulary in the field of nuclear energy and minority businesses.

"Jobs should be capital intensive, not labor intensive," she said.

Aside from housing problems, other recurring issues being addressed by the candidates are narcotics control, education reform, economic development, legalized gambling and improved city services.

The candidates have been campaigning mostly through mail canvassing, telephone work and by speaking at forums sponsored by community and business groups. They have presented their views to members of the Washington Board of Trade, the Independent Funeral Directors and All Souls Church.

Clarke has received endorsements from Seaton Street residents, various block club captains, the Washington Teachers Union and the International Brotherhood of Police, among others.

He is supported by Jerry Cooper, who is chairman of the Ward 1 Democrats, and Eudora Webster, vice chairwoman of the Ward 1 Democrats and treasurer of the Adams-Morgan Organizations.

Cooper said many Ward 1 Democrats support Clarke because "we think he has the foresight and the common sense to be able to apply his political sense and reason to all of us."

Of Clarke's opponents he said, "I cover the ward pretty seriously, and I find most people in the ward don't know who his opponents are."

James Washington, coordinator at the Upper Cardozo committee to re-elect the major, said Clarke is a favorite with residents in that part of the ward.

"Everybody that comes in here (to register to vote) express fond feelings for Clarke. He's the hardest worker on the city council, and we feel we're making good progress in housing up here."

Smith has generated support from Howard University students, members of the Goodwill Baptist Church, tenants in the Harvard Hall Tenants Association, which he founded, and various other residents in Adams-Morgan and Mount Pleasant.

John Jones, former executive director of AMO, is Smith's campaign manager.

"We're finding people are impressed with what he's done," said Jones. "He's worked with food co-ops all over the city, and now he's (an elected) Advisory Neighborhood Commissioner."

Wingfield's immediate support comes from neighbors within his community. He said he will woon begin a campaign to woo the business community.