Millionairess Marjorie Phillips and her son, Laughlin, have upset their Foxhall road neighbors by seeking permission to build 70 houses in the 14-acre backyard of the Phillips' estate.

The Phillipses filed an application recently with the District of Columbia Zoning Commission to create a planned unit development on their property, located on the south side of W Street NW between Foxhall Road and 44th Street. Neighbors say the project will bring too much traffic into their quiet and elegant area.

Present plans call for building an assortment of single-family and two-family houses as will as rowhouses, a communal swimming pool, two tennis courts and 203 parking spaces -- almost three per house.

But a Northwest Washington community group called the Committee for Planned Environmental Development is negotiating with the Phillipses in hopes of scaling down the project.

The wooded property backs up to Glover Archbold Park and Whitehaven Parkway, behind Mrs. Phillips's mansion at 2101 Foxhall Rd. Three years ago, the Phillips estate was ranked as the eighth most expensive residential property in Washington; it probably has moved up a couple of notches since, because two of the larger estates, also in the Foxhall neighborhood, have already been cut up into housing developments.

The mansion and 2 1/2 acres will remain the home of Mrs. Phillips, who is 85, but still actively involved in the family's development plans. Her late husband, Duncan, whose family fortune flowed from steel, founded Washington's Phillips Collection in 1921. It was the first museum of modern art in the United States.

The Philips house is called Dun-Mar-Lin (for Duncan, Marjorie and Laughlin) and was designed by Washington architect Nathan Wyeth.

The tract to be developed is on the same dead-end section of W Street where the Federal Bureau of Investigation rented a house for its Abscam undercover meetings between "Arab sheiks" and politicians.

The Phillips' proposal is the latest, but by no means the biggest, of a series of luxury housing projects that are rapidly using up all the vacant land in one of the District of Columbia's most exclusive neighborhoods.

No prices have been disclosed for the homes to be built on the Phillips property, but other nearby developments offer houses starting around $300,000 and rapidly rising to the million-dollar class.

Just up Foxhall Road from the phillips property, the former Nelson Rockefeller estate is being turned into a luxury housing enclave by the development firm of Rozansky and Kay.

Rockefeller's house and one acre were sold 18 months ago to R. Sargent Shriver and his wife, Eunice Kennedy Shriver, for $750,000. On the remaining 24 acres, the developers are putting up 120 homes.

The Rockefeller property is now called Foxhall Crescents, and is expected to become a $60 million project by the time it is completed, five years from now. Originally prices were to start at $397,000, but few of the stripped-down models are being built, and constuction costs are escalating. t

Bigger and even more expensive houses are being built south on Foxhall Road at the intersection of Reservoir Road in a project called Foxhall Terraces.

There are only 21 homes in that 3.2-acre site on Kenmore Drive, but they are priced from $600,000 to $695,000. The Robert T. Foley Co. is building the houses in a Georgian style; they are four- and five-story homes, with elevators and terraces clustered closely on the steeply sloping tract.

The most expensive of the Foley houses are at the top of the site and have views of the Washington Monument. The Foxhall Terraces houses were designed by Architect Alan Lockman, who also drew the houses now being built further down Reservoir Road at Hillandale and the Cloisers of Georgetown.

The Cloisers, at the corner of Reservoir and 35th Street NW is a complex of town houses just started by the Donohoe Companies, on land formerly owned by a religious order affiliated with Georgetown University.

Hillandale, opposite Georgetown University Hospital, is the former estate of the Archbold family, whose patriarch was John D. Rockefeller's original partner in the oil business.

A firm owned by Dallas developer Clint Murchison Jr. is building 238 detached houses and rowhouses on the 42-acre Archbold property, once the largest private estate in the District.

The first group of 54 Hillandale town houses is now under contruction and as of last week, 32 had been sold. Prices range from $271,000 to $425,000. The next homes built on the rolling estate will be larger, the developer says, and 28 lots ae being reserved for single family homes.

The basic land use plans for developing both Hillandale and the Phillips property were developed by a Sasaki and Associates, a nationally known Watertown, Mass., firm with an office here.

Hillandale will ultimately have about eight houses per acre, while the Phillips' property is planned for five or six units to the acre.

While the Phillipses applied Jan. 19 for permission to create a planned unit development, the specifics of that project are likely to change significantly.

Family representatives met late this week with attorney Peter Work and other spokesmen for the Council for Planned Environmental Developement and an umbrella group of community organizations in the most exclusive neighborhoods of Northwest Washington.

"We have found them very cooperative and receptive to our ideas and we think the plan will be significantly improved," Work said. He said the council's concerns are the economics, the environmental impact and the effect on the surrounding neighborhood of the property.

The council held similar talks with Rosansky and Kay on the Rockefeler property and ultimately was given a consulting contract to help plan development of that tract. Initally opposed to the development, the group later supported the PUD plan for the Rockefeller estate and will endorse the Phillips plan if it can reach a similar accommodation, Work said.

Among the things the neighbors hope to do, is reduce the number of units built on the 14 acres. Work would not say how many units would have to be removed to make the project acceptable.

"That's the subject of negotiaiton," said J. Kirkwood White, former city planning official and now an attorney with Linowes and Blocher, the leading local zoning law firm. The same firm handled negotiaitons between Hillandale's developers and community groups in Burleith, the neighborhood just east of Hillandale.

Traffic in and out of that 238-unit development was a major issue and is also a sore point with the Phillips' neighbors. Plans now call for all 70 of the Phillips homes to be served from an entry off W Street, but residents want part of the traffic diverted directly only Foxhall Road.

Traffic on Foxhall is already a problem, however, and is likely to get worse with the construction of the Rockefeller and Phillips properties.

No time table has been set for the Phillips development, White said, but the family hopes to get all the necessary paperwork completed this year.

The planned unit development does not involve a change in zoning, but does require approval by municipal officials at two states. First the city must okay the general plan for the site; then it must ratify the architectural design.