Developers' interest in the hot real estate market in Shaw should be used to help lower-income residents remain in the area and to prevent small-business owners from being priced out of the market, an advocacy group said last week.

Representatives of Manna CDC presented an "equitable development" proposal to the board of directors of the National Capital Revitalization Corp. (NCRC), the city's publicly chartered economic development firm, at a meeting May 19. The firm over the next several months plans to seek bids from developers for vacant lots it owns at 7th Street and Rhode Island Avenue NW and at 7th and S streets NW.

Manna, an advocacy group with a long history of working for affordable housing in the neighborhood, asked the city to:

* Increase the amount of affordable housing it requires developers to build on city-owned parcels in the neighborhood;

* Require developers to offer below-market rents for existing small businesses;

* Recruit more Shaw residents for jobs created as a result of new projects.

Manna officials said the proposal, developed over 18 months, has the support of several advisory neighborhood commissioners, Ward 1 Council member Jim Graham (D), various churches and nonprofit organizations in the neighborhood and five private developers interested in building there.

"We cannot afford to stay," Anika Trahan, a single mother, told the board, explaining how rent for her one-bedroom apartment has climbed from $500 a month three years ago to $850. Rent for a two-bedroom she'd hoped to move into is now $1,800 a month, up from $1,100, Trahan said. "This is very personal for me."

Under the guidelines offered in the proposal, the NCRC would require that 30 percent of the housing built on either parcel be priced below market rates, with 15 percent of the units affordable to households making less than $25,000 a year and 15 percent affordable to households earning between $25,001 and $50,000 a year. To be affordable, the housing cost must not exceed 30 percent of gross household income. Currently, the NCRC requires that at least 20 percent of housing in its projects be set aside as affordable for households earning from $25,000 to $80,000 a year.

The guidelines also would require that three-fourths of all jobs created by new projects pay at least $15 an hour, or $12 an hour with health insurance and other benefits. District residents would be targeted for at least half of those jobs, with residents of Shaw preferred.

Manna's proposal also would reduce rents by up to 50 percent for enterprises owned by Shaw residents or for established neighborhood businesses. Space in new retail and commercial developments would be set aside for such businesses. Nonsubsidized businesses in newly built projects would be required to donate a percentage, as yet unspecified, of their revenues to a community social welfare fund.

Taken together, advisory neighborhood commissioner Alex Padro told the NCRC board, the measures would help renters and property owners who have been in Shaw since before the current boom.

"We're not looking to make a windfall by selling our property and moving away," Padro said. "We want to stay and be part of the renaissance."

The District's Office of Planning, which was briefed on Manna's proposal earlier this year, has incorporated much of the language into its draft guide to development in the area around the two NCRC-controlled parcels. The city hopes to revitalize that part of Shaw, which includes the long-vacant Howard Theater, into an "uptown destination district."

At the meeting May 19, NCRC board members said they would consider adopting Manna's guidelines when they issue requests for proposals for the sites in question.

"This is important food for thought," said Chairman Karen Hardwick. "We'll give this careful consideration."

Also at the meeting, the board gave preliminary approval to a development team's offer to buy a vacant site in the 900 block of 3rd Street, in the Mount Vernon Triangle, for $7 million.

The land is next to Mount Carmel Baptist Church, which has joined with two developers who own several adjacent blocks to propose building more than 1,000 residential units, a million feet of office space and a private school affiliated with the church.

NCRC chief executive Theodore Carter said the board accepted the development team's unsolicited offer, rather than putting the site out for bid, because it thought the project would greatly improve the surrounding neighborhood.

The NCRC agreed to sell the land for $1.5 million less than its appraised value, Carter said, because the development team agreed to make 20 percent of the 335 apartments it will build on the city-owned site affordable to lower-earning households. Exact terms of the deal will be negotiated over the next few months and must be discussed at a public hearing and approved by the D.C. Council.