"Today people don't see housing just as shelter, but rather as an investment that's the best hedge against inflation." "Young people earning $25,000 to $30,000 a year are buying $120,000 houses," "Thank God for the extra earning power of the working wife, or we wouldn't have the single family business." "Inflation is the best thing that ever happened to the housing industry."

That's how some of the country's biggest residential developers, together with the analysts who follow their business, analyzed the state of the American housing market at a meeting here of the Urban Land Institute.The developers -- indeed practically anyone with a stake in real estate -- seem to be sitting pretty as an ever-increasing portion of Americans' disposable income flows into housing and land.

Developers' concerns seem relatively minor: a drop in total housing starts as mortgage rates rise well above 10 percent, government red tape that slows subdivision starts, shortages of fresh land for development, escalating raw land prices.

The problem with this gravy train is that a lot of Americans -- the poor, many senior citizens and young people -- aren't and can't get aboard. It is diverting investment funds badly needed to make the United States competitive in world markets. It feeds the fires of inflation now undermining the national economy.

Even old-fashinoed saving now becomes perilous. "Every $1,000 you tuck away in a bank account loses up to twice as much to inflation and taxes as it earns in dividends. Stocks and bonds don't do much better," observes Kenneth Harney in a new book -- "Beating Inflation with Real Estate" [Random House]. Real estate, Harney suggests, it the best defense against inflation: Between 1967 and 1977, the consumer price index went up 83 percent but average home costs by 113 percent and unimproved land 150 percent. "What's more," he reports, "real estate offers abundant ways to defer, decrease or avoid taxation altogether, not only on or avoid taxation altogether, not only on its own gains but on your other income as well."

The real estate industry can't be held entirely responsible for this turn of events. It didn't create the inflationary mentality generated by government overspending, the oil crisis, or the nation's increased housing demand. It didn't pass the Equal Credit Oportunity Act of 1976, which was positive in guaranteeing women equal access to mortgage credit but negative in causing a huge jump in the value of the house for which a two-imcome couple could get a mortgage.

The time does seem ripe to ask whether national, state and local governments shouldn't start to turn the screws on a housing and land boom in danger of running amuck. A whole array of fine-tuning devices might be considered. They probably shouldn't include forcing up interest rates -- the point of consumer resistance to rising interest rates, like gasoline prices, is apparently much higher than anyone imagined.

A logical first step would be to rejuvenate the real estate market segment currently in emergency shape: rental housing. Sharply increased construction costs plus a narrowing gap between rental income and operating costs have depressed apartment construction for half a decade.

Presently there's a 50,000 annual shortfall in new apartments and many thousands of existing ones are being converted to condominiums, or in some cities, abandoned. Fear of rent control, now spreading rapidly in California and elsewhere, further depresses the building of new rental units.

The apartment shortage is serious enough for the country's "young mobiles" -- people between jobs and marriages and all those not yet ready to make a commitment on a house. But it's an energency situation for the poor. "Poor people are literally dying because of the housing situation," Florence Roisman of the National Housing Law Project recently told National Journal. "The poorest people double up. They live in shacks. Many poor people are living in cars without heat in the middle of winter." More than 3.5 million poor renters pay more than half their income for shelter.

Some major tax breaks for renters, parallel to the hallowed home mortgage interest deduction for homeowners, are in order. Mortgage interest deductions should, in the process, be curtailed to a reasonable dollar figure or percentage of a taxpayer's income. President Carter's 1980 budget cuts $4 billion in subsidy funds for low-income housing yet allows $2 billion in fresh Treasury losses because of greater deductions for mortgage interest and propert tax payments -- an alarming reversal of logical priorities.

Without a major policy change, the future scenario is clear enough: More and more Americans will "buy up" into much bigger houses than they need, just to ride the inflationary spiral. ("House hoggery" -- people in much larger houses than they need -- is becoming increasingly apparent, both in suburbs and newly renovated inner-city houses.) People will make themselves incredibly "house poor" just to get a first house and qualify for the federal tax inducements. And more and more people will be desperate to get any housing at all.

To dampen housing speculation and inflation, Congress might reduce or eliminate the tax preferences it allows for profits earned in selling a home. It might stop constantly reducing the minimum down payments for federally insured mortgases. And it might cast a critical eye upon the increasingly popular graduated mortgage payment schemes, already 22 percent of FHA business, which permit otherwise financially unprepared people to qualify for home purchase.

The hard fact is that credit liberalized too far too fast, not only heats up the housing market but depletes investment funds needed elsewhere in the economy. The "corrosive inflation" the nation is now experiencing, Treasury Micheael Blumenthal has noted, "discourages thrift and encourages imprudence." It also "distorts, reduces, delays and prevents needed capital formulation; it stultifies long-term business planning, and generates unproductive forms of purely speculative activites."

Cities' use of tax-exempt bonds to finance private housing, now under attack in Congress, is another example of alarming trends. Begun for low-income families alone, the programs were expanded to falluent households earing $50,000 or more in some localities. The inevitable result: a fresh spurt of money into the housing industry at a time of intense inflation; large housing bond issues that will eventually drive up the interest rates cities must pay for all their other municipal bond issues; finally immense cost to the U.S. Treasury -- and eventually all taxpayers. Tax-exempt bonds are yet further proof there is no free lunch.

The big developers, meeting here in Dallas, still talked the language of total housing starts and big multi-thousand outlying developments. But another vision was starting to haunt them. Just as the '70s brought, the smaller car, several thought the '80s might bring the "money-saving, down-sized home" in the form of clustered condominiums or cooperatives. Said Columbus, Ohio, developer James Klingbell: "Our sons and daughters -- the leaders of tomorrow -- don't want the suburbs. They want to save fuel, to preserve landmarks. The fact is a lot of them want to return to the city, no matter what we think of that as capitalists."

Still a minority theme, that vision of a more frugal -- and less inflationary -- future may be the only hopeful sign on the housing front today. CAPTION: Illustration, no caption, By George Rebh