District of Columbia officials have announced plans to use a 47-room hotel in Northwest Washington that police say is crime ridden and infested with drug dealers as the main temporary shelter for homeless families in the city.

The $1.3 million contract would be awarded to Pitts Motor Hotel, across the street from Meridian Hill Park, to house an estimated 400 evicted families over a year's time. The contract is scheduled to take effect July 1 unless city officials change their minds, according to a notice published last week in the D.C. Register.

Pitts has been used as a temporary shelter for homeless families in the past, but most such families currently are housed at the Parkside Hotel, 1336 I St. NW. Owners of the Parkside plan to close down soon for renovations.

The Pitts hotel at 1451 Belmont St. NW, was once a convenient and attractive hostel for middle-class tourists and businessmen, but business has fallen off during the past 15 years, according to hotel owner Cornelius Pitts.

He said that he is aware of some problems of drug use by residents in the past, but that most of the hotel's rooms now are occupied by homeless families.

"That's all behind us now. That's history. This is all D.C. government now. It's possible that one of the recipients is dealing in drugs. We just hope the government will screen these people," Pitts said yesterday.

Under terms of the contract, the hotel would be used exclusively for homeless families, a provision that some police said might lessen potential drug problems.

"People have been going in there renting rooms to cut dope and package it. If the city used it to house the homeless that would eliminate that type of usage. It has proven to be one of the popular spots for the cutting of drugs," said Lt. James Jones of the D.C. narcotics branch.

D.C. police said that since April of last year, there have been 17 arrests at the hotel, including several for drug possession and assault with a deadly weapon.

"We've been working in and out of the Pitts over the past 10 years and made several arrests," said police officer John Eisel. In February 1981, narcotics investigators arrested three people in a second-floor room and charged them with possession of heroin. Police recovered 63 bags of the drug and a .38-caliber handgun in the raid.

Pitts said, "I would be less than honest if I wouldn't say that I recognize that some of the clients we have live by their wits. But we would not allow them to set up shop in our place.

"The city has drug and prostitution problems and we have accepted some of these people that we have later learned were engaged in such things. There is nothing illegal about providing shelter for these people as long as they are not violating the law while they are here."

One police officer, who asked not to be named, said he was uncertain if conversion of the hotel to exclusive use as a shelter for the homeless would lessen drug traffic.

"I would question the judgment of that decision to move families into the hotel ," said one narcotics sergeant. "It's right off of 14th Street, and there is going to be some overflow of drugs. Drugs and prostitution are in the area. It all depends on the type of security is there."

The average length of time that a displaced D.C. family lives in an emergency shelter is about 40 days, according to Patricia Yates, chief of social services for the D.C. Department of Human Services.

The typical family, she said, is headed by a welfare mother with two or more children and has been evicted for nonpayment of rent. Some of them have been displaced by fires. The contract with Pitts stipulates that the hotel provide three cooked meals daily and a supervised recreational program for the families, she said.

"I think Pitts is a nice place," Yates said. "The hotel is clean, and comfortable. I think it meets the needs of the families and does a good job of maintenance and upkeep of the facility. The environment has a lot of crime but, it's not entirely just a crime area. A lot of families live in the area, too."

Pitts said, "The contract was an absolute must for me. I just don't know how I would be able to make it without it." Under terms of the contract, Pitts will receive the same amount of money even if the city does not need to use all of his rooms.

Virgil McDonald, chief of the office of administration at DHS, said that three hotels bid for the contract and that Pitts was not the lowest bidder. But he declined yesterday to identify the other bidders or to say why Pitts was chosen.