Former Housing and Urban Development Secretary Caria Hills says the Carter administration should not "shift gears and try invent another centerpiece" for its housing policy. The Republican-era centerpiece, the so-called Section 8 program, was a rent subsidy plan.

However, Hills expressed little confidence that her concept of flexible subsidized housing or freedom of choice for cities would be broadened by her successor at HUD, Patricia Roberts Harris.

In a conversation with editors and reporters of The Washington Post, Hills defended her conviction that cities should be allowed to opt for new construction, rehabilitation or subsidies for existing housing rather than having Washington dictate the choice.The flexible concept is already in effect for community development in the form of block grants. Hills' motto was "subsidize people, not bricks and mortar."

Whereas the Democratic approach has traditionally been more paternalistic, given to vast social programs, the Republican philosophy, the former Cabinet officer said, was one of "free enterprise," and leaving decisions up to local officials.

The Ford administration's budget request for fiscal 1978 reflects this flexibility by eliminating the annual allocations for each type of rent subsidy and Section 8 and requesting money for the life of the project. The new budget calls for an expenditure of $23.8 billion on housing for a period ranging between 15 and 40 years. This works out to an annual cost of $570 million and would create 292, 000 units, were all the money put into new construction. Were it all put into subsidizing existing housing, it would cost $1.5 billion for existing units.A likely mixture of the two would mean subsidies for 400,000 units.

Hills denounced evaluations of progress in housing for the poor that are based solely on new construction and do not include rehabilitated housing. The reference was to Senate Banking, Housing and Urban Affairs Committee Chairman Willaim Proxmire, one of her chief critics, and to Democrates in general.

In a letter to Hills this week, Proxmire charged that HUD had "failed by the one standard that counts: provide adequate housing."

Harris has pledged to increase starts to 2.6 million a year.

Hills said she would urge the Carter administration to pay attention to local needs and work through the private sector rather than just launching a program to put unemployed construction workers back on the job.

On the other points, Hills said:

Energy conservation in construction has already become a selling point.

Administrators can and should weed out incompetent bureaucrats by giving them sufficient warning before firing them; however, she did not think the HUD staff was too big for what it had to accomplish.

The conflict of interest or revolving door program for government employees returning to the private sector is not that "offensive," and the government would lose a great deal of talent for enforcing it strictly.