Boarded up and dilapidated, the pale blue and yellow abandoned naval barracks at 4th Street and Martin Luther King Jr. Avenue SE were dope dens for youngsters and free hotel rooms for vagrants for about 10 years, until last summer, when they were razed to make way for the future.

Neighborhood residents remembered how the box-shaped barracks used to stay clean and impressive, adding to the rest of the Congress Heights neighborhood's orderliness. The naval families who lived in the barracks competed for awards for keeping the most beautiful yard and home. Area entrepreneurs liked having the approximately 100 World War II-vintage homes in the area because they ensured a certain measure of business activity.

Now 80 colorful town houses call the site home. And evidence of a revival does not end there. Like squares on a checkerboard, new homes are standing all over the Congress Heights community, which for development purposes also includes Washington Highlands. Ten blocks away, at 1500 Southern Avenue SE, another 100 new homes were built about a year ago.

Like most of the territory east of the Anacostia River, Congress Heights has long been neglected and forgotten. Now, however, housing and economic developers consider the Congress Heights area Washington's "last frontier.

A section of the city that has preserved much of its historical, semisuburban ambience, Congress Heights has many spacious detached homes, wide streets, rolling hills, plentiful parkland and picturesque, panoramic views of downtown D.C. -- the nighttime view of Capitol Hill, federal buildings and national monuments is especially beautiful.

People who live in the community define it as everything southwest of St. Elizabeths Hospital; for outsiders, that would be roughly an area bounded by I-295 and Martin Luther King Jr. Ave. to the north, Southern Avenue and the Maryland border to the south, Bolling Air Vorce Base to the west and St. Elizabeths' outermost boundary to the east. Several neighborhoods within the boundaries have the potential to attract middle- and upper-middle class families.

During the past two years, developers have begun cultivating that potential. Approximately 200 new homes, two condominium developments and two apartment complexes have been either newly constructed or recycled from abandoned and run-down housing. Also, two fast-food chain restaurants -- Church's and Bojangles -- have moved into the area.

Late last month, Capital City Federal Savings and Loan Association opened a branch along the main business district in Congress Heights, which begins right outside the east gate of St. Elizabeths Hospital on Martin Luther King Jr. Avenue and extends to Atlantic Street. Capital City officials say they were eager to get in on the ground floor of development in the area and make the savings and loan known as a partner to community businesses and residents who soon may seek loans for development projects.

"This area is experiencing regeneration, revival and renewal," said Kenneth Plant, president of Capital City. "We wanted to get in on it before everybody else. The opportunities for deposits and lending -- both commercial and residential -- are great because this is a growing area."

Councilwoman Wilhelmina Rolark (D-Ward 8), whose jurisdiction includes Congress Heights, is, of course, glad to see the new burst of life. "This is the first time in almost 25 years that a new bank has seen fit to locate itself in the area, so there is an air of great expectation in the community. I'm sure the mere fact that it is here will stimulate the kind of interplay that is needed among the business community in order to keep the development going.

"I'm pleased with what I see so far and I see it going steadily upward. With the improved housing, there will be more professionals and higher level government employes moving in. That will give us stronger role models for our youth."

Rolark said displacement in Congress Heights should be lower than in other parts of the city because many of the renovated buildings were vacant and about 10 percent of the new housing is scheduled to be sold under a government subsidy program that helps low- to moderate-income persons become homeowners.

Donald Lee, a 21-year-old Congress Heights native who stopped by the bank after his classes at the University of the District of Columbia two weeks ago to "check out the new bank" and meet the bank manager, noted, "The opening of this bank says that the powers that be have confidence in our community. They know we have a lot of capital, but we need more business establishments to facilitate our cash."

Lee added, "When you look at the development in Congress Heights, it's like watching lilies popping up from parched soil. It's been a neglected area for some time, but there's so much potential here, and it's good to see someone with the necessary capital taking an interest in developing it. It's funny though -- people around here are hesitant. They're not getting too overjoyed about the bank opening up because banks really don't have a good reputation for helping black communities like ours set up and expand our own businesses."

Walter Pettiford, manager of the Capital City Congress Heights branch, thinks the bank will surprise Lee and other skeptics. An eight-year resident of the area and assistant minister at nearby New Macedonia Baptist Church, Pettiford intends to help the bank become a "leader, an initiator and a motivator."

"I plan to get out in the street," he says, "and find out what the people's needs are and how to best suit those needs. It really is exciting to look at all the possibilities for growth. I will do all I can as manager of the bank to play a part in that development."

Pettiford's first order of business as bank manager was to arrange for the distribution of food stamps, Metro bus tokens and passes, and free check cashing services to St. Elizabeths patients and employes. The bank has established about 130 checking and savings accounts so far. But no loans have been made yet. Pettiford says the bank is still working out a lending policy.

The recent development in the area has been long awaited by Congress Heights community leaders, who have been working behind the scenes for economic and social revitalization since the 1960s. For many years, outsiders have turned up their noses at the underdeveloped and partially run-down Congress Heights -- a neighbor of poverty-ridden Anacostia, and itself a community comprised of hundreds of single-parent families on public assistance. When most outsiders think of Congress Heights, they are apt to think of its high crime rate and its concentration of idle, unemployed adults and disruptive youths, many of whom are high school dropouts.

For the most part, since there are no major businesses, shopping malls or government offices in Congress Heights, the only people seen in the area are those who live there. Some longtime residents say that makes for the truly friendly, "down-home" character of the community; but, they also say, it makes them feel isolated from the rest of the city.

"This has always been an uncongested area where you could cross the bridge and escape the hustle and bustle of the rest of the city," says Jane Vines, president of the Congress Heights Civic Association, "and though the recent development will make it a more attractive place to live, we still need so much more." Some of those needs include construction of a Metro subway station, a family movie theater, a job training site, more light industry and a large variety store, such as a K Mart, she said.

"When I moved out here in 1964, these Congress Park apartments, (a complex at Alabama Avenue and Savannah Street SE now being renovated) were really nice. It was still a lot of white families there and there was a shopping center, swimming pools, cleaners, beauty parlor and grocery store.

"Later on, poor blacks displaced from Southwest and just in from the South moved in there. Since they did not own their property, they let it run down. No one cared about the area. Now there's just two mom and pop grocery stores and a liquor store."

Perry Vedder, financial loan planner for the black-operated Anacostia Economic Development Corporation, agreed that the revitalization of Congress Heights is off the ground and expected to soar, but cautioned that it will not be totally successful until there is greater cohesiveness in the business community. He said he was appalled that the development corporation, which has several renovation projects under way in the Anacostia-Congress Heights area, was not invited to the Capital City bank's grand opening.

"There's not much consolidation of economic institutions in Southeast," Vedder says. "And without consolidation, there won't be a well-planned effort to satisfy the needs of the community."