Although the District's largest open-air drug markets are shrinking and in some cases vanishing, a troubling new trend has developed, police say.

Drug dealers are moving off the street and into apartment buildings and businesses, where police need search and arrest warrants to go after them.

In response, the D.C. Council gave preliminary approval Tuesday to a bill that would authorize the city to shut down many businesses, including barbershops, apartments, rooming houses and restaurants, that permit drug activity on their premises.

"If a business person allows these kinds of activities to go on, the idea is to authorize us to take his license away," said Garland Pinkston Jr., director of the D.C. Office of Intergovernmental Relations.

Dorothy Brizill, an activist in Columbia Heights, said the legislation is desperately needed in her community, where she said drug dealers have moved inside.

Some stores have installed benches where dealers sit and do business as if they are in an office, she said. While some store owners are intimidated by the dealers and "turn a blind eye," others lease space to them, she said.

Over a recent 16-month period, police responded 363 times to four businesses in the 2000 to 2200 blocks of 14th Street NW. About half the calls resulted in drug arrests, according to testimony to a council committee by Donald C. Murray, head of the D.C. Department of Consumer and Regulatory Affairs. The businesses remain open.

"People perceive that drug dealing has lessened," Brizill said. "But step inside a business and it's, 'Hey, what's going on here?' "

Under the legislation, police would determine whether a business owner "knowingly permits" drug dealing to occur and would inform regulatory officials, who issue business licenses.

Police could base their decision on information obtained while interrogating drug dealers, said John McNeal, a DCRA attorney.

George Frain, secretary of the 18th Street and Columbia Road Business Association, called the plan a "drastic action," but probably necessary because of the city's massive number of drug-related homicides. "If businesses are involved with drugs, police should crack down," he said.

Business owners could appeal for a hearing if their license is seized, but it may not be granted, McNeal said. "The bill is designed to give business owners responsibility for upholding the law in the District," he said.

Don Denton, a Capitol Hill real estate agent and past president of the Capitol Hill Association of Merchants, said he hopes the city will not use the new law to harm business owners who are unaware of drug activity or who ask police for help but get no response.