A growing controversy over the conversion of apartments into hybrid "apartment hotels" is the latest issue to spark dissension among tenants, landlords and divisions of the District government.

Owners maintain that apartment hotels fill a need for short- and medium-term housing, rescue inner-city buildings from decay, give them added income needed for repairs and bring a new vibrancy to the doowntown area.

Opponents charge that the conversions are a convenient circumvention of the rent control law, which permits landlords to increase rents beyond the means of former tenants. They also maintain that it is unfair competition for owners of rent-controlled apartments and may cut into the downtown hotel business.

Since 1974, when the moratorium was imposed on conversions of apartments into condominiums, at least 10 buildings in the District have been transformed into apartment hotels.Several more are reportedly in the works and one is being built from the ground up.

As the name implies, an apartment hotel combines the features of an apartment, including a full kitchen, with those of a hotel, such as maid and linen service. Fully furnished accommodations, ranging from efficiencies to elaborate suites, are rented to tenants for periods ranging from overnight to several months, a year or indefinitely. Some offer leases, while others don't. Some have restaurants.

They differ from old residential hotels in that very few tenants consider them their permanent home in Washington. Riverside Towers on Virginia Avenue puts up many State Department diplomats on home leave; the Intrigue Hotel on New Hampshire Avenue houses Kennedy Center performers, and Hampshire Towers on New Hampshire Avenue caters to foreigners who work for the World Bank and the International Monetary Fund.

At One Washington Circle, a recently converted apartment house, some suites are rented on a long-term basis by corporations. House-hunters also use apartment hotels as temporary residences, the managers say.

Rates vary according to the accommodations and length of stay. One night at Guest Quarters on New Hampshire Avenue NW costs the same as a downtown hotel - $44 to $51. The monthly rate at Canterbury House on N Street is about the same as that of an apartment in the Northwest - $360 to $450 a month, except that an 8 per cent hotel tax is added on the former.

By all reports, apartment hotels are a very good business. Several owners said they were almost always fully occupied - largely due to word of mouth advertising.

Harold J. Nussbaum, owner of the Intrigue, where a one-bedroom unit for two persons costs $690 a month, says he pays $100,000 a year in District taxes. Guest Quarters, which also has a facility in Alexandria, is building another apartment hotel at 2500 Pennsylvania, in the redeveloping West End area.

"This place had a horrible reputation when we bought it in 1973," Nussbuam said. At the time of sale, gross receipts were $200,000 annually; now they're up to $570,000, he said.

The trend to conversion to apartment hotels has aroused the ire of John O'Neill, executive vice president of the Apartment and Office Building Association of Metropolitan Washington. He calls the conversions "sophisticated abandonment, leaving the rental business by whatever means you can. I wish it wasn't happening; it's not beneficial for the town to lose its rental stock."

But he noted that a fourth of the city's rental stock can be described as money-loosing.

When a rent controlled apartment building is taken off the market for six months, it can be put back into circulation without controls under several conditions: If it is for student housing (such as the Glover-Tunlaw apartments American University recently bought to use as dormitory), or a hotel, or an apartment building in which 60 per cent of the tenants are transients, there are no controls.

Eviction and remodeling usually takes at least six months. When the new facility is reopeneed, as happened at One Washington Circle this year, an apartment that formerly cost between $180 and $200 a month can rent, fully furnished, for $900 a month. A deluxe suite there costs $58 a day, or $1,500 a month.

Tenants living in rent-controlled buildings can protest eviction, as they are doing a Highland Apartments. The Rent Control Board says it would take a complaint from an apartment hotel resident to get any action on high rents there. Since the new tenants are affluent, many on government per diems, as well as being short term renters, they are unlikely to complain about rates.

Some apartment hotels may be in technical violation of the transient regulation, which states that controls must apply if more than 40 per cent of the tenants stay more than 15 days at a time. Building managers questioned either will not say or do not know what the previce lengths of stay are.

Nussbaum says three of his residents have been there eight years. The Rent Control Board does not monitor for violations.