When the D.C. Redevelopment Land Agency bought four brick apartment buildings at 1st and M streets NW in the late 1960s, Mary Gordon and dozens of her neighbors eventually were forced to move.

Gordon remembers that the city promised to rehabilitate the rundown but sturdily constructed buildings and give former tenants the first opportunity to move back in.

She never expected that 10 years later the four-story buildings still would be vacant and boarded, a New York Avenue eyesore in the midst of a housing shortage.

D.C. Mayor Marion Barry, sporting a white hard hat with his name on the side, used a crowbar to pry a board off a long-shuttered window in the project, aided by a construction worker inside the building.

That act symbolically began work on the first of the 733 housing units the mayor promised two months ago to rehabilitate in his "get-the -boards-off-the-vacant-housing" program.

"Your're gonna hear the number 733 quite frequently," Barry told a crowd of more than 100 persons standing outside in the 85-degree weather.

The 43 one-bedroom and 39 two-bedroom condominiums will be sold at prices averaging $31,500.

The once-spartan buildings have been gutted and redesigned inside to contain fewer but larger units boasting such creature comforts as air-conditioning, dishwashers, and wall-to-wall carpeting.

The D.C. Housing Industry Corp., a group composed of developers, lenders, realtors, and other housing experts, will sponsor the project. A $2.6 million loan to the corporation will be provided by a coalition of banks.The D.C. government is assisting with about $600,000 to defray some costs.

The contractor and construction manager is Knott Restoration. John L. Knott Jr., who runs the Washington-area office of the 70-year-old Baltimore restoration company, said actual construction will begin in June and is expected to continue for about a year.

The community will be involved in the project in various ways, he added. "We don't want this to be a project where the existing community residents are standing outside the fence looking in," Knott said.

City officials said priority in selling the units will be to families earning less than $25,000 a year who have been displaced from the community or from other urban renewal areas.

Barry's speech was full of promises. He promised construction jobs for area residents, restoration of a nearby medical facility that has sat equipped and unused for years, 30,000 jobs for youths in the city this summer, and air-conditioning for tenants in the city-owned Sibley Plaza project, some of whom were picketing his speech for that cause.

Barry and the housing director also promised down payment assistance for families who otherwise cannot afford the condominiums.

That down payment assistance may be necessary for many displaced families. G. V. (Mike) Brenneman, a condominium specialist who is the project captain for the D.C. Housing Industry, estimated yesterday that if a family buys one of the condominiums costing $31,500, with a 95 percent mortgage, the principal and interest payments would be $277 a month. Add to that taxes of about $29 a month and a monthly condomimium fee ranging to about $60 a month, and it totals $366 a month, he said.

One local housing activist questioned how many displaced persons actually will benefit from the rehabilitation. "For those that move in, it's a good project," he said. "But poor people that moved out can't get back. They're scattered all across the city now. I doubt whether DCHD [the city housing department] knows where half of them are now."

Gordon, who now lives at the Sursam Corda subsidized housing project, said she enjoyed her nine years at 80 New York Ave. NW, but is unsure now whether she will be able to afford one of the condominiums. Still, she's pleased that the city finally is doing something with the buildings. "I think a lot of people need a place to stay," she said.