The Homestead Act helped settle the West for a growing America, providing farms and homes for more than half a million families before the program ended 50 years ago.

And in recent years, many of the nation's larger cities have offered analagous programs in efforts to revitalize their crumbling cores.

Now New York City, which has more than its share of urban woes, has also come up with a "shopsteading act" to help stem the decline of small businesses in what had been thriving neighborhood commercial sections.

"These are marginal commercial areas," says Janet Langsam, who is in charge of the shopsteading program as assistant commissioner of the city's Housing Preservation and Development Department. "We are trying to restore the life and vitality that once existed in these neighborhoods."

The Big Apple project is similar to a shopsteading program begun in Baltimore in 1977, the first and only other major city with such a plan.

Baltimore officials offered shopsteaders buildings in three rundown sections of the city -- Jonestown, Union Square and Washington Hill -- for purchase at $100 each.

"We have 38 buildings awarded," says a spokesman for the Baltimore Housing Department, "in various stages of development. The buildings are in a very declining state.

These buildings need $75,000 to $100,000 for rehabilitation," the spokesman says. "The buildings were taken by the city for taxes."

The New York City shopstead pilot project involves 15 city-owned buildings -- also taken for nonpayment of taxes -- on a nine-block stretch of Fifth Avenue in the Park Slope section of Brooklyn. Rehabilitation costs are expected to be similar to Baltimore's.

Park Slope has become a favorite of young New Yorkers interested in restoring brownstone houses outside the high-rent districts of Manhattan.

"We're looking for stores to service the neighborhood," Langsam explains.

The city will begin to run newspaper ads on Monday requesting proposals from would-be shopsteaders, asking what purchase price they would offer and what use they would make of the shop.

"Applications are due by May 15," Langsam says. "We've gotten almost 100 inquiries since the program was announced."

Shopsteading is designed to become a citywide program, according to Anthony Gliedman, commissioner of Housing Preservation and Development. The city will sell commercial and mixed-use buildings to successful applicants who will rehabilitate the buildings and become owner-operators of service establishments in them.

Gliedman says the Park Slope Fifth Avenue Development Corp. has asked that the selected new businesses include a bakery, a book and newspaper store, a flower shop, a beauty parlor, an antique store and a shoe repair shop. s

Criteria for selection of applicants will include financial resources, previous experience in their proposed business, benefit to the community and job development opportunities.