The city housing department's offices were saved from the auction block this week with the payment of more than $170,000 in delinquent real estate taxes.

Madeline Petty, acting director of the D.C. Department of Housing and Community Development, said yesterday that overdue taxes totaling $171,077 were paid in full on Monday. Earlier last month tax collectors had threatened to auction off the office building the department occupies if taxes and late penalties totaling more than $180,000 were not paid by Nov. 30.

Jeffrey Humber, acting director of the D.C. Department of Finance and Revenue, said tax collectors waived a portion of the penalties and interest because "there was some confusion initially about whether they owed the taxes."

The question of whether the building at 1133 North Capitol St. was required to pay property taxes arose because it is owned by a subsidiary corporation of the D.C. Development Corp., a quasi-public arm of the housing department. DCDC and the housing department are the sole tenants of the converted warehouse, and department officials at one point contended that the building should be exempt from property taxes, as are all city-owned buildings.

A lawyer for the department, however, said the agency planned to pay all taxes due. The housing department subsequently gave DCDC the money to pay the taxes, and this week the corporation paid the bill.

According to the delinquent tax notices sent to the department, $99,696 in unpaid taxes, penalties and interest were owed on the building from the previous tax year, which ended June 30. An additional $86,588 in taxes and approximately $8,916 in penalties were overdue for the first half of the current tax year.