Officials of Charlottesville and the Department of Housing and Urban Development are negotiating the fate of a city quota system that limits the number of black families in public housing.

When the Charlottesville housing authority desegregated the city's public housing in 1980, it set an official goal of half black and half white families in its projects. About a year later the city eased that limit to allow black residents a maximum of 65 percent and a minimum of 35 percent of the housing spaces.

Both quota plans brought outraged protests from the black community, and opponents took the issue to HUD's Philadelphia regional office, which ruled that the quotas were a civil rights violation.

Now the city is involved in "delicate negotiations" over the issue with officials at HUD headquarters, said Ronald R. Tweel, the city housing authority's lawyer.

A HUD official said the agency must decide whether the Charlottesville plan denies or delays any applicant's admission to public housing.

If so, the city could be ruled in violation of the 1964 Civil Rights Act and would be required to alter the system. If the city resists, the case would be referred to the Justice Department.

Families on the waiting list for public housing in Charlottesville are given apartments on a "first-come, first-served basis except when it would throw the project out of the range" of the racial quota, Tweel said. The waiting list for Charlottesville's 371 public housing units contained 207 black families and 82 white ones this week, he said.

Tweel said a means of maintaining integration was needed because Charlottesville's public housing "was viewed as black housing. Whites didn't even apply."

He said the city "considers the quotas a temporary measure until the waiting list reflects the needs of Charlottesville."

Because the waiting list contains far more blacks than whites, black families are sometimes passed over when their names reach the top of the list, according to Cindy Stratton, president of the Charlottesville chapter of the NAACP.

She said black families have told her of being on the list for "five or six years," while white families move into public housing units within a year or two, or even a few months in some cases.

Stratton said her organization supports integrated housing, but "we don't support race-specific tenant selection." Nearly 35 percent of the city's black population have incomes below federal poverty levels, "so for us to support a policy that would eliminate them from public housing is absurd," she said.

Use of racial quotas has been one of the most controversial housing issues in the nation in recent years.

HUD has not resolved the issue even though it has been asked to rule on integration-maintenance plans, but the Justice Department has initiated court challenges against such quotas at a New York City public housing project.

When the Charlottesville housing authority in 1980 built five new housing projects of 12 to 25 units each at sites scattered throughout the city, the first tenants were selected to achieve the racial balance the city sought, Tweel said.

HUD General Counsel John J. Knapp, who will rule on the case, said the "effort was pretty successful. The new projects are biracial and have stayed that way."

The city's oldest project, Westhaven, also was integrated. The 20-year-old project "has never had a white tenancy over 20 percent, but has been able to maintain a white tenancy and some integration," Knapp said.

He said HUD officials have not yet determined the plan's impact on the city's poor residents.

According to 1980 census figures, 18.1 percent of Charlottesville's approximately 40,000 residents are black, but blacks comprise about 30 percent of those with incomes below federal poverty levels.

Stratton of the NAACP said poor blacks often have lower incomes and fewer options for improving their condition than poor whites. She said she believes that black unemployment is around 10 percent, double the city's estimate, and said blacks have "little access to the private market" for jobs.

"I don't doubt that city officials are sincere in their desire to see public housing totally integrated, but the end does not always justify the means," Stratton said.

Tweel said that because about 70 percent of the Charlottesville families who have incomes below the poverty level are white, an "all-black project doesn't meet their needs . . . nor foster the social goals" of the city government.

The housing authority set the 65-percent limit on black tenants as the "tipping point" beyond which whites would stop moving in, he said. In setting that limit, he said, many factors were considered, including the character and history of neighborhoods, architecture of the buildings, and spaces between houses.

Black residents also have complained that the city gave public housing short shrift until the integration program.

"When they started talking about the need to integrate housing . . . they talked about having air conditioning, winterizing the buildings, fixing up the yard," Stratton said. "Why weren't all those amenities offered five or 10 years ago? That was a slap in the face to the black community."

The cost of housing is high in Charlottesville in relation to income and costs of living, Stratton said. "I think this [the quota system] is a key issue because housing will always be a problem in Charlottesville, and we cannot afford to let it die. I think the city knows that."