Kensington voters last week rejected a proposal to use state funds to convert two residential lots into a town park.

By a vote of 240 to 188, voters decided not to use state Program Open Space funds to turn the lots at 10234 Montgomery Ave. and 10232 Carroll Place into parkland.

Opponents said they feared city residents would have to pay up to $75,000 of the lots' $300,000 purchase price. The state would have pumped $225,000 into the project.

Supporters of the park proposal wanted to preserve the area from development.

Town voters Sept. 10 also selected Spencer Harrill to take over the City Council seat of Charlotte Gurasinski, who was elected in June but resigned recently for health reasons. Harrill won 179 votes, defeating Valentine Deale, who received 156 votes. CITY OF ROCKVILLE

In a move to create more affordable housing in the city, the Rockville City Council last week voted to allow residents to establish separate apartments in their homes and to require builders of large residential developments to set aside housing units for low- and moderate-income residents.

Similar to the Montgomery County Moderately Priced Dwelling Unit Program, the Rockville system orders builders of residential developments with more than 50 units to earmark 12.5 percent of the projects for residents with low and moderate incomes. Along Rockville Pike and in the Town Center area, two areas where the city is trying to promote residential development, builders will have to set aside 15 percent of the units for the program.

In an effort to encourage the inclusion of affordable units also in smaller projects, the council voted to permit developers to waive certain permits and fees in exchange for building some lower-priced units in smaller housing projects.

Like the county program, the city program offers incentives to developers. In certain areas of the city, the council voted to permit developers to build bigger projects in exchange for construction of affordable units.

Also, as under the county program, a developer may ask for trade-offs. For example, if the low- and moderate-rent units would not be appropriate at one site, the developer could ask for permission to build more of the units at another site, could donate money to the city's affordable housing fund or could donate land to the city on which lower-priced units might be built.

The council will set the maximum sales prices and rents for the units in the program, with the prices restricted for 10 years so an owner cannot make a large, immediate profit.

The council also decided at the Sept. 10 session to permit residents of single-family homes in the city to use part of their homes as accessory apartments, after obtaining approval from the city's Board of Appeals.

NONPROFIT HOUSE SOLD -- Ribbon cutting ceremonies were held Sept. 10 in the city's Lincoln Park area to welcome Tanya Lee and her daughter, Eneia, to their new home, a three-bedroom house built on the site of the old Red Barn apartments at 114 Frederick Ave.

The house was purchased by Lee through a new program that gave her a no-interest loan. Under the agreement, the city donated the 8,000-square-foot parcel to Habitat for Humantity, a nonprofit group that builds low-cost housing. The group is providing Lee with the loan for the house, which is expected to cost about $80,000.

Also involved in the project were the Montgomery County Association of Realtors, which worked to keep settlement costs low; the Maryland Building Industry Association, which encouraged its members to provide inexpensive labor and materials; and the Rockville Housing Authority and Lincoln Park Citizens Association, which screened applicants interested in buying the house. Lee, 28, and her daughter are lifelong Lincoln Park residents.

The house is on a site that caused much controversy in the 1980s. The eight-unit Red Barn apartment building was razed in 1987 after neighbors and police complained it had deteriorated and become a haven for criminal activity.