The development of neighborhood "fire watch" programs, community scrutiny of fire department records that may reveal areas where fires are prevalent and the identification of properties vulnerable to fire are some of the ways community groups can combat the growing devastation of arson in America, the National Trust for Historic Preservation recommends in a new report.

Responding to the rising impact of arson on older urban communities and a mounting loss of historic structures often burned by vandals and vagrants, the federally chartered preservation group has issued a special report on the rapidly escalating crime that claimed more than 670,000 properties in 1980, including hundreds in the Washington area.

Although juvenile vandalism may account for 40 percent of all intentionally set fires, arson for profit also is spreading with alarming intensity, the group reports, because fire insurance often provides high financial gains while the risk of detection is unusually low. Less than one percent of all arson cases result in incarceration of a suspect, the Federal Emergency Management Agency said in its 1979 report to Congress on arson.

The new "Stop Arson" report, published as a special issue of the National Trust's Conserve Neighborhoods newsletter, is based on materials produced by the The Conservancy Group, a preservation organization based in Washington, and the U.S. Fire Administration, a division of the management agency. Additional anti-arson aids available from the Trust include a community organizing kit and a slide show.

Arson is one of the fastest growing major crimes in the United States, notes Richard Strother, assistant administrator of the Fire Administration. With the exception of automobile theft, it is "the most expensive crime in the country," Strother said. The 670,000 structures that were "torched" by firesetters in 1980 involved losses estimated by federal fire experts in excess of $1.7 billion. The figures are significantly up from about 63,750 cases and a loss of $316 million reported in 1964.

Arson has destroyed several buildings in the Washington area that were regarded by preservation groups as historic properties. While controversy was raging over plans to demolish the 19th-century complex that made up Kann's department store, the Pennsylvania Avenue landmark was destroyed by fire in 1979.

District of Columbia officials said the blaze was probably started by someone inside the then-abandoned building. The heavily damaged structure later was razed by the Pennsylvania Avenue Development Corp., owner of the building, and a park was built in its place.

Other local structures of note that the FBI believes were hit by arsonists:

Rockledge Mansion in Prince William County. The 184-year-old Occoquan residence, designed by Gunston Hall architect William Buckland, was nearly destroyed in January 1980; damage was set at $250,000. A 19-year-old man was convicted of setting fire to the building and was sentenced to eight years in prison.

The former Nicaraguan embassy in Northwest Washington. Abandoned and boarded up in 1979 after the overthrow of the Somoza regime, the uninsured mansion on Ellicott Street NW was extensively burned in November; damage was estimated at $1.1 million.

Alexandria's City Hall, an 111-year-old structure in Old Town that suffered about $3,000 in damage last September.

Marshall Hall, a plantation house at the old amusement park on the Potomac in Prince George's County. Fire destroyed the 256-year-old structure last October.

Other historic buildings in the area that were damaged by fire may have been torched, but fire investigators say they often are unable to find positive evidence.

"Arson is difficult to indentify," said Emily Eig, an architectual historian and a member of the board of The Conservancy Group. "Even though crime detection is getting better, so are the arsonists," and many cases go unreported, she said.

The Conservancy Group was asked by the Fire Administration to identify and assess incidents of arson in historic preservation. Conservancy Group member Joy Brandon said revenge, vandalism by juveniles, carelessness by vagrants and attempts to beat preservation laws are the motivations of many arsonists.

"Now that we know there is a problem," Eig said, "we're going to gather statistics. There's a need for numbers."

The organization looked at the way 10 preservation groups elsewhere in the country deal with their arson problems. "We tried to find out where they needed help" in their battles against arson, said Eig.

Her organization found that the groups faced many difficulties, including low public awareness of the problem, inadequate security programs and building codes that make some older buildings vulnerable to fire.

In addition, it was concluded that local preservation laws can be "incentives to burning," Eig said. Once a structure has been designated as historic, strict restoration requirements often leave owners without salvage solutions they can afford, she said, and in desperation, they could turn to arson "as the only alternative."

In a move designed to alleviate part of that problem, property owners recently were given the option of turning down a listing in the National Register of Historic Places maintained by the Department of Interior, Eig said. Kann's department store, added to the list before the option, was removed from the register after it burned.

While Washington properties listed on the Joint Committee on Landmarks' Inventory of Historic Sites are protected from demolition or alteration, exceptions can be made in cases of financial hardship, Eig said. "The District has a fairly good appeals process" that respects historic areas but at the same time ameliorates the arson incentives, she said. "Arson isn't rampant in Washington," Eig added.

Nevertheless, more than 500 suspected arsons were reported in the District during 1979 and 1980, resulting in 21 arrests and eight convictions. In action aimed at increasing the arrest and conviction rate, the City Council is scheduled to vote Tuesday on legislation that would protect insurance companies from libel actions when they supply information to fire investigators.

The bill would require insurors to supply to city fire officials data about persons or business involved in fires of suspicious origin. The measure is similar to legislation enacted in 38 states, including Maryland and Virginia. It would take effect after a mandatory 30-day review by Congress.