The age-old battle between the District of Columbia's landlords and tenants has reupted again-this time over the little-down but increasing phenomenon of apartment units in downtown areas being converted to hotel rroms to escape rent controol.

Neighborhood leaders in Foggy Bottom, West End and Dupont Circle have accused apartment building owners ofdepleting the already scarce supply of rental housing there by shifting portions of their buildings to hotel use.

This conversion permits owners to avoid rent controls on remaining apartment units through a loophole in the city's rental accommodations law. Apartment industry spokesmen estimate that some 1,200 rental units have been converted to hotel use since the law was implemented in 1974.

The apartment building owners say they have made use of this provision in the law because rent control regulations are so stringent that many owners have no choice but to convert to other uses to stay financially alive.

Some owners have turned to the well-known condominium conversion process but others to the less familiar tactic of hotel conversion.

The issue of hotel conversion bubbled up at a D.C. Zoning Commission hearing Monday when a platoon of advisory neighborhood commissioners urged restrictions on hotel conversions and a general halt to hotel construction in residential areas of the city. Officials from the city adminstrator's of fice also expressed concern about the proliferation of hotel conversions.

ANC commissioner Kathy Lipscomb called hotel conversions a "usurpation of housing" and said the conversion of almost 500 units in the south Dupont Circle area in recent years "has been an intrusion into the residential character" of the area.

New hotel conversions have occurred mostly in the Foggy Bottom, West End and Dupont Circle areas west and northwest of downtown because of the buildings' proximity to business and government offices in the city.

Converted "apartment-hotels" range from those that cater to single-night guests to buildings that provide rooms with kitchens and other facilities for visitors staying up to six or eight weeks at a time.

John T. O'Neill, executive vice president of the Apartment and Office Building Association, countered in a written statement submitted to the zoning commission that restrictions on hotel conversions would be "unfair and confiscatory."

In a telephone interview later, O'Neill acknowledged that many apartment buildings have taken advantage of a loophole in the city's rental accommodations law permitting them to avoid rent controls by converting 60 percent or more of the units in their buildings to hotel rooms. Under the law, the hotel rooms would be subject to a hotel tax, but the remaining apartment units would be exempt from rent controls.

Apartment building owners are being "economically squeezed" by the small profit margin allowed under rent control, he said, "and there is a diminishing incentive to invest in rental properties in this city."

The D.C. Rental Accommodations Office generally limits owners to an 8 percent return on the assessed value of their property.

O'Neill said the rental accommodations office has granted "roughly a 21 to 22 percent increase in rents" since 1974, while consumer prices have risen at a generally faster rate.

"Our proift margin has shrunk or disappeared," he said " . . . Change of use to a condominium or a hotel or an office is just about the only escape valve."

Last month, the rental accommodations commission approved rent increases of up to 9.4 percent, based on landlords' operating costs. The increases could take effect June 1 if the city council allows the proposed increases to stand.

A report submitted to the zoning commission Monday by the city administrator's office cited hotel conversions as a "serious problem." It recommended prohibition of conversions in medium density apartment zones and medium to high density zones. The report would permit conversions as "special exceptions" in high density apartment zones, subject to public hearings and approval of the Board of Zoning Adjustment.

"The loss of apartment units for permanent residents in these neighborhoods is not only a problem in terms of housing supply [but] relates as well to planning and zoning policies," assistant city administrator James O. Gibson said in the report.

D.C City Council member John Wilson (D-Ward 2) told the zoning commission that the hotel conversion loophole in the rent control law might be closed more effectively through legislative amendment than zoning regulation changes.

The zoning commission will resume hearings next month on the conversion issue and regulation of hotels and motels in general before deciding on any zoning regulation changes.