Former mayor Marion Barry yesterday formally declared his candidacy for the D.C. Council seat in Ward 8, saying he is emerging from political retirement to save his community from mismanaged schools, skyrocketing home prices and neglectful city leaders.

Wearing an embroidered shirt from Ghana and a straw hat from Jamaica, a gaunt-looking Barry emerged from a borrowed Mercedes at his campaign headquarters in the heart of the city's poorest political subdivision. Through nearly an hour of laudatory introductions, the 68-year-old former mayor sat quietly on a folding chair, sipping water as if he were just passing time on a warm afternoon.

When he finally rose to speak, his voice was purposeful and strong.

"I thought I had retired from electoral politics. I really had. Then I observed the scene in Ward 8 in particular and the city in general. And I was horrified about what's happening," Barry told about 100 cheering supporters before launching into a diatribe against lousy city services and "failing" public schools.

Although he suffers from diabetes and high blood pressure, has survived prostate cancer and has been deviled at times by drug and alcohol addiction, Barry said that his health is good and that he's ready to serve.

"Someone asked me, 'Are you up to it?' " Barry told the crowd. "Damn right, I'm up to it! With age comes wisdom. You know that, too, don't you? With age comes wisdom."

Barry spoke under a fluttering green and white banner bearing his campaign slogan: "Ward 8 Needs a Fighter." But as he begins his Democratic primary challenge against two-term incumbent Sandy Allen, one question some residents have is: Does Ward 8 still need Marion Barry?

Much has changed since residents rallied around Barry 12 years ago when he emerged from prison after the famous FBI sting that caught him on videotape smoking crack cocaine. Then, Barry counted on the forgiveness of the impoverished senior citizens, single mothers and dispossessed men who dominate the ward. They elected him to the council and formed the political base for his march back to the mayor's office under a flag of personal redemption

These days, young professionals and middle-class home buyers are moving into many neighborhoods in the ward, taxpayers more likely to focus on property values than on Barry's promises of free college tuition and summer jobs.

"Many young urban professionals are not happy about Barry entering the race. Many of us see it as a digression," said Yavocka Young, 35, an ANC commissioner who bought a house in the ward in 1991. "He tends to nurture those people who are down on their luck. But we can't just soak up all the social services the city has to offer. We have to be able to get in the game."

Some longtime ward residents, too, are distrustful of Barry, who presided as mayor over some of the most difficult and deadly years in city history. Grady Edwards, 45, a D.C. Air National Guardsman who owns a house around the corner from Barry headquarters, said he would not vote for Barry because "you never go back. What's he going to do different?"

Still, Barry remains supremely popular, a charismatic old lion who's lost a few teeth but still has a magnificent roar. When he appeared in February at Ballou Senior High School after the shooting death of star running back James Richardson, a packed gymnasium erupted in applause. Yesterday, when radio talk show host Joe Madison passed around a cardboard box and asked for contributions to Barry's campaign, people threw in more than $600 in checks and cash.

Barry, who lives in the Washington View Apartments, noted that he won 80 percent of the vote in Ward 8 during his 1994 mayoral comeback, and 75 percent when he ran for council in 1992.

"These are people that love me, and I love them," he told reporters.

Darrin Davis, 40, arrived in the District from Dallas in 1991 and, after making some shrewd real estate investments in Capitol Hill, identified neighborhoods east of the Anacostia River as the next big thing.

Housing prices were skyrocketing west of the river, but Ward 8 had cheap land and big plans for redevelopment. Public housing complexes were being demolished and replaced with neat townhouses. In the past two years alone, construction has begun or been completed on more than 5,400 residential units, according to the D.C. Marketing Center; another 1,200 units are in the planning stages, along with the first major retail developments in the area in years.

Davis bought and renovated a century-old house with a river view. Today, he ranks among the top-selling real estate agents in Ward 8. Though solidly middle class, he plans to vote for Barry.

"I don't think he's afraid to speak his mind. That's the kind of person I admire," Davis said. "We all have personal issues. He gets people to listen whether you want to or not."

Barry's appeal is bolstered by two factors. First, much of Ward 8 remains mired in poverty and receptive to his message of comfort. Second, and perhaps more important, there is widespread dissatisfaction with Allen.

Ward 8 residents tell stories about the failure of her office to respond to complaints about prostitutes, drug dealers, unlicensed group homes, polluting gas stations and wrong-way drivers who endanger children.

John Manning, 67, is a microbiologist who moved back to Ward 8 five years ago, bought a house and opened a pizza parlor after living for years in Silver Spring. Manning said he had been optimistic about Allen, but "we haven't gotten much from her." Now Manning is leaning toward Barry.

"I think his mind is still good. And I think he has a genuine interest for the people," Manning said. His biggest worry? Barry's sobriety, he said, and "the permanency of his rehabilitation."

In recent weeks, as rumors swirled about his candidacy, Barry has refused to discuss the addictions that forced him from the mayor's office in 1991. Two years ago, after he said he would campaign for an at-large council seat, U.S. Park Police said they found him at Buzzard Point in a black Jaguar with traces of marijuana and crack cocaine.

Citing the principles of Alcoholics Anonymous, Barry said in an interview: "Your recovery is your recovery. You don't talk about it."

Yesterday, in response to questions, he said only: "I live a clean life now."

There are those who fully expect Barry to implode again. Many of them have been calling Allen's campaign, offering time and cash, said campaign manager Yvonne Cooper.

"The people in my community have a lot more sense than people are giving them credit for," Allen said recently. "I've seen a slogan about how Ward 8 needs a fighter. Well, I'm a boxer. Boxers have technique. Fighters just brawl."

Many Ward 8 residents say they owe Marion Barry, regardless of his personal demons. Clarence Green, 28, a construction worker, recalled the January day two years ago when Barry spotted him crying at a bus stop, mourning his sister who had been shot in the head.

Barry pulled $60 from his pocket and told Green to "go home, get a drink."

"I'll definitely vote for him," Green said, smiling. "He's a good dude."

Staff writer Hamil R. Harris contributed to this report.

Marion Barry with press secretary Linda Green, campaign manager Dion Jordan and WOL radio's Joe Madison, collecting funds for the ex-mayor.After former mayor Marion Barry announces that he is a candidate for the Ward 8 D.C. Council seat, he receives an enthusiastic response from supporters at his campaign headquarters. "These are people that love me, and I love them," Barry told reporters.