About 250 demonstrators gathered at the District Building yesterday in support of rent control and were greeted by City Council members who urged them to keep pressuring the council until there are enough votes to pass a new rent control law.

Meanwhile, inside the building, witnesses testified at the second day of public hearings on two proposals under consideration to replace the current law, which expires April 30.

One of the proposals, introduced by City Council Chairman David A. Clarke and favored by many tenants, would extend the provisions of the current law. Clarke and four council members who support his bill addressed the demonstrators yesterday.

"Rent control is an important policy statement on the part of this body," council member Frank A. Smith Jr. (D-Ward 1) told the crowd. "It is important to keep up the pressure to see that rent control stays in place."

The other rent proposal, introduced by council member John Ray (D-At Large), has angered tenants, primarily because the bill would lift controls on housing units as they become vacant, a process known as vacancy decontrol.

Some tenants view vacancy decontrol as the first step to ending all rent controls. Yesterday, two signs carried by demonstrators read: "Wanted: John Ray for Attempted Murder of Rent Control," and "Phase out John Ray in 1988."

"I think John Ray is doing a terrible injustice to tenants in Washington," said Glover Lee, a demonstrator and a tenant who has lived in a Dupont Circle apartment since 1969. "Rent control is the only thing that has kept me in the city."

For the last 10 years, the city has provided rent control as an attempt to make decent and safe housing available and affordable to residents. Landlords, however, have argued that the controls have led to a decline in the quality and quantity of the District's housing stock, because owners fail to receive enough income to maintain their buildings and are given no incentive to stay in the rental business.

During the current debate, tenants have maintained that the council must determine whether it will focus on continuing protections for tenants or increasing the income of landlords.

Ray maintains that rent control has not worked. He said during yesterday's hearing that vacancy decontrol is fair to tenants and landlords.

Witnesses stressed that the council needs to take a comprehensive approach to the city's housing problems and that rent control is but one part of the picture.

Betti S. Whaley, president of the Washington Urban League, testifed that the Ray bill "offers the needed framework" for developing a more comprehensive approach. She said that the league supports provisions in the Ray bill designed to stimulate contruction and rehabilitation of buildings by offering tax incentives.

Whaley, however, objected to Ray's vacancy decontrol provision and suggested that the city lift controls on buildings with 10 units or less. Under both the Clarke and Ray bills, persons who own four units or less would be exempt.

Another witness, Larry F. Weston, executive director of the Metropolitan Washington Planning and Housing Association, presented a meticulous analysis of each bill and suggested that the council needs to retain rent control.

"It is important to allay public fears and anxiety over the 'loss of rent control' and to fashion sound housing policy that addresses the many problems in D.C.'s housing market," Weston said.