The D.C. Zoning Commission, taking its strongest step yet toward creating a "living downtown," has signaled its intention to require residential development in a broad area that developers had targeted mainly for offices.

The plan would produce 6,720 housing units in downtown's East End, Chinatown and the area around Mount Vernon Square, according to zoning commission Chairman Tersh Boasberg. The plan also would use downtown office development to raise money for subsidized housing elsewhere in the District.

The commission's action appeared to be a defeat for the development industry, which had argued for much less rigid requirements.

Boasberg persuaded three other commissioners to back a compromise he had drafted as the commission met late into the night Thursday. Fewer than a dozen zoning lawyers looked on as the commission came to terms with the most sweeping proposals it has considered in 30 years, which had drawn capacity crowds to emotional hearings earlier this year.

The agreement was unanimous but informal. A fifth commissioner was absent. The commission said it would take the first of two formal votes in mid-July.

The commission rejected recommendations by Mayor Marion Barry's city planners that the sites of several proposed developments -- including the Far East Center in Chinatown and Gallery Place, above a Metrorail station -- be spared from the housing requirements.

The commission also rejected a proposal by the development industry that would have allowed developers to contribute money to a fund for the construction of housing elsewhere in the city. Instead, the commission said, developers should be allowed to fulfill a quarter of the housing quota for each project by making cash payments.

The D.C. Office of Planning had proposed that developers be rewarded for building downtown housing with so-called bonuses, rights to build more office space than current zoning allows, but the commission eliminated those bonuses.

Commission member John G. Parsons, who represents the National Park Service, said the District's Comprehensive Plan, a legally binding statement of public policy goals, clearly directed the commission to create a neighborhood downtown. He said he was not troubled by the possibility that the neighborhood would serve affluent professionals instead of lower-income people and families.

"I don't feel any obligation to provide affordable housing here," Parsons said.

Commission member Lloyd Smith, executive director of the Marshall Heights Community Development Corp., said he had to take into account the housing needs of lower-income people in the city, even as he acknowledged that "that's not a zoning issue." Smith argued that profits generated by office development should be tapped to produce affordable housing in other city neighborhoods.

Boasberg convinced the commission members that they could create a new downtown community and generate funds for subsidized housing elsewhere if they extended the housing requirements to the major sites that the planning office sought to exempt.

But Steven E. Sher, director of zoning services for Wilkes, Artis, Hedrick & Lane, a law firm that represents developers, said the commission's plan "is pretty far from what we think will work."