Leigh Ann Oliver, 28 and single, thought she'd found the perfect neighborhood in which to buy her first house. Northwest Washington's Tenleytown is close to Metro and has character: People walk their children to school together, throw holiday parties, trade plants and generally look out for each other.

So on July 30, Oliver moved into a two-story Victorian in the 3800 block of Grant Road. That day, a 105-year-old Victorian across the street was razed to make room for planned condominiums. Suddenly, a stunned Oliver had learned firsthand how the District's residential building boom--while a reflection of increased optimism about the city--is beginning to change many neighborhoods' character, particularly in Northwest.

"I stood there in disbelief for about five minutes, my jaw wide open," Oliver said. "I was very shocked a grand old house could come down so quickly. My next reaction was to find out what would happen there next."

What's next, if the D.C. government approves the developer's proposal, is a 22-unit condominium community in a neighborhood of long-established single-family houses. Oliver became an activist overnight, joining her neighbors in challenging the plan as out of character for the residential community east of Wisconsin Avenue.

It's a story playing out elsewhere. With a soaring economy and a new mayor bent on trying to boost tax revenue by attracting businesses and residents back to the city, the District now is more attractive than the suburbs to a growing number of people, especially childless whites, according to U.S. Census data. The city still is losing population overall, but the net loss has been shrinking for three years, and D.C. real estate sales are the strongest in a decade, agents say.

Builders are trying to satisfy that demand with "in-fill" development--replacing older, usually dilapidated houses with new ones that often are larger than anything else in the neighborhood. This is creating tension between developers and residents, with the D.C. government trying to referee.

"I could tick off probably 12 development issues in Ward 3," said Kathy Patterson (D), the D.C. Council member who represents many of the Northwest neighborhoods where such battles are raging. She said there are more development conflicts in her ward than at any time since she was first elected in 1994.

In the Forest Hills section of Northwest Washington, a 43-year-old, three-story house was replaced with a four-story house--"Fit for an Ambassador!" reads the listing--that the neighbors said violated zoning regulations. The builder has erected a berm to hide the lowest floor from view and get around code restrictions that prohibit more than three stories, but neighbors are still challenging the work.

Eager developers are sending letters to owners of aging houses, trying to persuade them to sell their property so that new, larger residences can be built in their place. "I'm amazed at their chutzpah," said Virginia Singer, an over-60 resident of Tenleytown who has received two such letters in the last 18 months. "They're looking for every square inch they can get."

Developers and real estate agents said that in most cases, new houses enhance a neighborhood.

"The parcels themselves are typically ugly and neglected, so anything done to them is an improvement in terms of aesthetics and use of the property," said Marc Fleisher, a Realtor in the Tenleytown area who has sold many of the new homes. "Any time a parcel becomes available, there's a premium on it, especially if it's near a Metro."

The planned condominium complex would be at Nebraska Avenue and Albemarle Street, about 250 feet from the Tenleytown Metro station, and that proximity to the subway could hold the key to whether it will be approved by the city.

The developer, the Holladay Corp., is making a case that the city's zoning commission should allow higher-density housing at the site because that's the type of development that has been done successfully near other Metro stations in this region. The half-acre site is surrounded by homes on three sides and Woodrow Wilson High School on the other.

The District's comprehensive plan, Holladay noted, identifies Tenleytown as "a housing opportunity area" where additional housing is desirable in part because of the Metro. The condos would be a transition from the dense development along Wisconsin Avenue to the area of about 70 homes that includes the 3800 and 3900 blocks of Albemarle Street, Alton Place, Yuma Street and Windom Place and 38th and 39th streets.

"Most transit stations are developed at a much higher density," said Rita J. Bamberger, a vice president at Holladay. "We're basically sitting across from a Metro stop."

The neighbors, many of whom use Metro and appreciate how it has boosted home values, said they support high-density housing around subway stops and don't want to be viewed as not-in-my-back-yard obstructionists. But they say developers such as Holladay should concentrate on building housing in the commercial district along Wisconsin, which they say better reflects what the city's comprehensive plan has in mind when it refers to "housing opportunity areas."

"The plan was not intended to allow developers to begin planting oversize, high-density buildings in stable, single-family neighborhoods like ours--particularly when areas already targeted for such development remain plainly underdeveloped," said Cathy Wiss, who is "over 50" and lives in the 3800 block of Albemarle.

An added concern is the scale of the project and the traffic it could generate. The two town-house-style condo buildings would be four stories high, or about 40 feet, enough for a two-story unit to sit atop another two-story unit.

Each unit would have a garage for one car, with access off Albemarle only. The two- and three-bedroom units, aimed at young professionals without children, would sell for up to the mid-$300,000s. Most of the mature trees on the half-acre lot would have to be removed; the builder says nearby Soapstone Creek, a tributary of Rock Creek, would not be damaged.

Most of the other houses in the neighborhood are only two stories; Leigh Ann Oliver fears people would look down from the new buildings and into her back yard and windows.

"It would be out of proportion even if they tried to make it look like single-family houses," said the Rev. Ronald Conner, 54, who has lived all his life across the street from the site in the 4400 block of Grant Road. His 87-year-old mother, Vivian Conner, chimed in: "We don't need more hubbub stuff around here."

As much as anything, the Tenleytown neighbors are worried that their special way of life would be spoiled by the development. If Holladay gets a toehold in their community, they ask, what developer would be next?

"This is a litmus test," said Margaret Siebel, 42, sitting in her dining room eating cake while her 5-year-old son, Henry, drew Pokemon characters. "This type of neighborhood--the quality of suburbia without moving out to the suburbs--is imperiled."

John Kostyack, 38, who lives with his wife and two young sons in the 3800 block of Alton Place, added: "To me, the broader question is: What's going to happen to a valuable thing--a self-contained community?"

Holladay's Bamberger, noting the company recently worked with residents of a Falls Church neighborhood where the company has built a development of town houses and single-family houses, said that the Tenleytown condos would not make traffic conditions there worse, and that the buildings would be set back far enough from the street that they wouldn't tower over the neighborhood.

"I think it's to the city's credit that people want to come back," Bamberger said. "All urban areas--Boston, Chicago, San Francisco--are experiencing this. Here, it's testimony to Mayor Tony Williams's faith that he's going to be able to turn things around.

"We do want to fit in," she added. "We think the plan we proposed will be attractive, both in architecture and that it meets the city's housing objectives. A city is about having an interesting urban fabric."

CAPTION: Neighbors Leigh Ann Oliver and the Rev. Ronald Conner are upset about development plans in Tenleytown.