The D.C. Redevelopment Land Agency yesterday approved development proposals for a small shopping center and a clothing store at two city-owned sites along the rundown H Street NE commercial strip.

At one site, along the now-vacant south side of H Street between Eighth and 10th streets, developers said they would construct space for several stores in a shopping center that likely would be anchored by a Dart Drug store and a Trak Auto outlet.

They said it could be completed by the spring of 1986.

A short distance away, in the middle of the 700 block of H Street, Princess Shops, a Baltimore-based chain of 34 stores selling moderately priced women's and children's clothing, won the right to construct another of its stores and predicted that it would be open by next March.

The RLA development approvals are the latest attempts to refurbish the H Street corridor, a substantial portion of which was destroyed in the 1968 riots after the assassination of the Rev. Martin Luther King Jr., which now is dotted with several dozen deteriorating and boarded-up buildings.

The five-member board has granted development rights for various H Street tracts in the past, only to be forced to withdraw the rights when developers were unable to fulfill their construction promises.

The city has recently started ripping up concrete sidewalks along H Street and replacing them with bricks to add a touch of up-scale class to a rundown neighborhood. The District also has hired an architect to design a common facade for the 11 stores on the north side of the 800 block to add a dressier appearance to the community.

The $2.4 million shopping center approved yesterday would be developed by a group called Parcel Seven Associates.

It is composed of developer Gary D. Rappaport, real estate investor J. Gerald Lustine, attorney Robert Jeffers, architect Charles I. Bryant and the Washington Urban League. Rappaport and Lustine would each own 37 1/2 percent of the project, with Jeffers, Bryant and the Urban League sharing the remaining 25 percent.

Under the terms of the RLA approval, the group has 30 days to complete negotiations to purchase the tract between Eighth and 10th streets.

The city has advertised the parcel at $690,000, but the developers said in their proposal that it was worth only $217,630. Lustine said he hopes the city will sell the parcel for even less than that and also finance the land purchase.

"We're in the position of pioneer" in redevelopment along H Street, Lustine said. "You've got to entice people to come on to these properties."

Princess Shops and its real estate partner, Miller Realty Co., agreed to pay the city the full appraised value of $40,800 for their much smaller site.

The five-member RLA panel unanimously approved selections of both developers, in each case rejecting competing proposals by developer Ozzie Clay.

The agency's staff concluded that Clay's firm, H Street Mall Development Co., "has not demonstrated its capability to acquire and develop both parcels," a contention he disputed.