In a bold attempt to alleviate the housing crisis precipitated by the Sept. 19 earthquake, the government expropriated 625 acres of private urban properties today and announced plans to build new dwellings for 180,000 homeless city residents.

The surprise move was applauded by labor leaders, leftist opposition groups and above all by residents of the downtown residential district devastated by the earthquake.

The takeover will affect more than 7,000 private buildings, most of them old, poorly maintained apartment houses. Only a minority, however, were judged to have suffered serious structural damage in the disaster three weeks ago. The expropriated buildings are expected to be leveled to open ground for new apartments that will be sold through long-term, low-interest mortgages.

An emergency $150 million building fund has been allotted for the program, President Miguel de la Madrid announced after signing the expropriation decree. Construction will be completed within a year, pledged Ramon Aguirre, Mexico City's appointed mayor.

Effective today, the takeover order is certain to be challenged in the courts by hundreds of affected property owners. As the first expropriation decree of the de la Madrid administration, a government halfway through its term and not previously given to such populist gestures, it has unnerved private business groups.

Opponents are given little chance of reversing the measure, however, especially since most of the affected property owners are widely viewed as slumlords. The city is explicitly empowered to take over property for reasons of "public utility," and Mexican courts have never struck down an executive branch expropriation initiative, observers noted.

"The term expropriation scares a lot of people, but it must be remembered that in Mexico the right to property is not absolute," said Senate leader Antonio Riva Palacio Lopez. The measure "doesn't imply a change in policy" for the de la Madrid government, he added.