The District government has scotched a deal to rent a boarded, vacant Northwest Washington apartment building for use as a "transition house" for 70 young working adults seeking to become independent of city assistance.

The city had agreed to pay $1,095,000 to lease the eight-story building at 1009 11th St. NW for one year, a deal that amounted to paying $1,303 a month rent for each efficiency or dormitory unit, to house single mothers and their children and persons coming out of the juvenile justice system.

By contrast, furnished one-bedroom apartments in Georgetown or overlooking Rock Creek Park can be rented for about $1,000 a month.

The D.C. City Council, in adopting a $2.3 billion budget last week for the year starting Oct. 1, cut a $1.4 million request to run the 11th Street transition program and allocated $300,000 for planning and for smaller demonstration programs.

Social Services Commissioner Audrey Rowe said the city has told the Jildar Corp., which had contracted to buy the building and lease it to the city, "that we were ending the negotiations" over rental of the property. Rowe said the city does not intend to lease the property in the future.

Under the terms of the city's agreement with Jildar, the District had pledged to pay utility costs, estimated at $60,000 a year, as well as undetermined maintenance expenses.

Rowe said last month that she thought the proposed rent for the property was "a fair price," because the building also would have had offices for the transition program, a cafeteria and a kitchen, and it might have been used for other social service programs.

James P. Chandler Sr., Jildar's board chairman, said the transition house was needed. But he said the lease arrangements, negotiated by his wife, Elizabeth T. Chandler, Jildar's president, "didn't make economic sense to me." He said Jildar would have spent a total of $3.5 million to buy and renovate the building and had been guaranteed only the one-year lease with the city. It is unclear what will happen to the building now.

The District had an option to extend its lease for four years, pending annual City Council and congressional approval of the transition program. The rent for five years would have totaled $4,516,875. Through her husband, Elizabeth Chandler declined to comment.