I read with great interest the editorial {Aug. 4} concerning the need for more shelter and housing in Washington neighborhoods for individuals now leaving institutions. As the community liaison in the Mental Retardation and Developmental Disabilities Administration of the District's Department of Human Services, my job is to convince residents that having a group home in their area will be an asset to the neighborhood.

The Mental Retardation Administration is under court order to place in homes all individuals from Forest Haven, an institution for the mentally retarded. They include severely retarded persons, not just those who have been labeled as mildly retarded. We must also provide community living arrangements for people from St. Elizabeths Hospital who have been diagnosed as being both retarded and mentally ill.

Many neighborhoods have accepted group homes for our clients, but there are many more neighborhoods that have not been as welcoming. Attending neighborhood meetings to discuss the opening of homes reminds one of the civil rights meetings of the 1960s. The common refrain is: ''We have nothing against the mentally retarded, but we don't want them living next door to us.'' Neighbors are encouraged to help us monitor the homes and to serve on advisory boards for the homes, but the basic objections are so emotionally based that appeals to reason and positive action go unheard.

Where are all the citizens of the District who were horrified at the inhumane housing of individuals in institutions? Where are all the citizens who fought for the right to live in all neighborhoods? I am still awaiting a positive and accepting community response.

SHIRLEY REES Community Liaison Department of Human Services Government of the District of Columbia Washington