Neighborhood residents and city officials got a sneak preview last month of the Rendezvous restaurant, which will specialize in New Orleans and Cajun food. The interior decorations will include ceiling fans and vintage photos of New Orleans jazz greats. Live piano music will entertain diners.

Next spring, a rooftop patio and sidewalk cafe will be added.

The restaurant plans to open next month. Restaurant openings usually attract little attention in this city where eateries can come and go with rapidity. But the Rendezvous is different because its address is on U Street.

That's right, U Street Northwest, once the main street of black Washington and now synonymous with drugs, illegal activities and urban decay.

The restaurant's arrival, at the Southwest corner of 16th and U Streets, is one of several signals that gentrification, dormant for about two years, is again inching east on U Street and now stands two blocks from 14th and U, once the city's best known drug corner.

A few blocks away, expensive condominiums are taking shape in gutted buildings that have stood vacant for years.

In the eight-block area between Swan and V Streets and 15th and 18th Streets NW, eight apartment buildings with a total of 238 units are undergoing renovation.

In 1982 in this neighborhood, developers were cutting condominium prices trying to sell units in a depressed market.

Today three events have occurred to trigger a neighborhood renaissance -- the building of the city's new muncipal office building at 14th and U Streets, designation of a new historic district in the neighborhood and changes in the tax law that allow the sale of condominiums to groups of investors needing tax writeoffs instead of to individual homeowners.

"We felt the neighborhood would be a focal point for present and future development in Washington," said Joseph Saffell, general manager and an investors in the Rendezvous. "The municipal center will be two blocks away. And whenever you see growth and development in the residential areas -- taking the boards off -- that's a good sign."

Also at the corner of 16th and U, an unnamed purchaser has a contract to buy the building where Mayor Marion Barry and his former wife Mary Treadwell ran Pride, Inc., an economic development outfit that helped find jobs for city youths.

The prospective buyer plans to renovate the building, on the Southeast corner, and turn it into office space, according to Vogel and Hoffman real estate company, the current owners.

And on the Northwest corner of 16th and U, workers are refurbishing the grand old Balfour apartment building into 53 one- and two-bedroom apartments.

"We believe the entire area is really coming back," said Tom Barksdale, marketing director for the Balfour, where rents will start at about $650 a month, with an option to purchase after five years for an average price of $90,000. "It's not Connecticut Avenue at the bridge. But it will be one day -- and pretty soon."

Gentrification has moved onto western U Street with one thrust pushing up from Dupont Circle and the other pushing down from Adams-Morgan. The large houses in the 1700 block of U Street started attracting middle-class blacks and whites a few years ago.

But further gentrification was slowed by the recession and high interest rates. But now with lower interest rates, the continued interest in urban living among young professionals, the scarcity of property close to downtown and the city's commitment to upgrading the neighborhood through projects such as the new municipal building, a low-key resurgence is under way.

But the single most important catalyst for redevelopment was the designation of the 1700 block of U Street and its surrounding blocks as a historic district, developers said. Along with that status comes lucrative tax credits to encourage the restoration of older buildings. Though these laws were enacted in 1981, their effects are just now being reflected, developers said.

"Historic tax benefits are so important in the economics of condo conversions and renovations at this point that I would be surprised to see much renovation going on outside of these areas," said Scott Fuller, a partner in the company that is renovating the historic 77-unit Wardman apartments at 1916 17th St. "Without it, Washington would be dead in its tracks."

Developers of commercial buildings are allowed to take 25 percent of the cost of renovating a building in a historic district as a tax credit.

Most of the renovations that are under way or planned are located in the existing 16th Street historic district or the new Striver's Section, just to the west.

The new condominium developers are selling to syndicates representing doctors and lawyers, who will rent out the units for five years to get the maximum tax writeoffs. Then the syndicates will sell to individual home buyers or other syndicates depending on the market.

"No one is relying on homeowners any more," said Mia Soughyar, an Adams-Morgan and Dupont Circle developer who last year renovated the firehouse at 1624 U St. NW, turning it into 11 one-bedroom duplex and triplex units selling for $75,000 to $95,000.

"We go for lesser profits but more assurance of selling the property and not getting stuck with huge construction loans," she said. "I didn't even try to talk to homeowners. From the beginning I went to investors and they bought them on the drawings."

David Hampson, a developer who has renovated five small apartment buildings in the neighborhood over the last three years and is now doing two others, says he is convinced of the neighborhood's economic value. "It's just the coming area."