When Victoria Bernardo purchased a two-story brick row house in the Stanton Park neighborhood of Capitol Hill three years ago, the main attraction for her was its proximity to Union Station.

Bernardo, an occupational therapist, was intrigued by the talk of converting the massive 1907 Beaux Arts railroad station to a glittering cluster of shops, restaurants, movie theaters and office buildings. If the development worked out, she reasoned, the house she bought at 229 F St. NE for $128,000 might someday skyrocket in value.

Today, Bernardo and her neighbors are happily caught up in a real estate boomlet -- sparked by the $150 million Union Station project and plans for two other major buildings projects nearby -- that has rekindled interest in Stanton Park. Single-family houses now sell for $150,000 to $200,000, real estate brokers say, with some going for $300,000 or more.

"I'm hoping it will stimulate a lot of other development and businesses, including along H Street," Bernardo said recently while standing in her tiny front yard. "The Hill is evolving into a really pleasant neighborhood. Of course, we don't want it to be overdone. We don't want it like Georgetown."

Marilyn Saks-McMillion, a real estate agent with Shannon & Luchs who lives on Bernardo's block, said the area "began turning rapidly" within the past year, primarily in reaction to the Union Station development that some have likened to Faneuil Hall, a waterfront development in Boston.

"Low interest rates had something to do with it, but a lot of people are coming in on the upswing of {real estate} appreciation around Union Station," she said.

The Union Station project has fostered both excitement and foreboding among residents of Stanton Park, bounded by G, East Capitol, 2nd and 9th streets NE.

While many expect to reap benefits from rising property values and easy access to first-rate movie theaters and restaurants, some fear the attendant traffic congestion and added parking problems on side streets could spoil the area's "neighborly," unpretentious ambiance.

"The vastly increased density is what I'm concerned about," said Margot Higgins, a long-time resident and Advisory Neighborhood Commission member.

"It's not only parking but pedestrian traffic, too. The pedestrian approaches to Union Station are the worst I've ever seen."

Liz Wood, chairman of the Stanton Park Neighborhood Association, insists there is little danger the development will result in hectic night life and street activity like that in in Georgetown and Adams Morgan. Still, she said, "With the confluence of all those planned projects, I can see permanent gridlock down there."

When completed by private developers, the new Union Station will contain offices, one of the city's largest shopping malls containing 100 stores, two large upscale restaurants and a nine-theater movie complex.

Two adjacent projects are still on the drawing boards: A renovation of the old Post Office building across First Street NE from the station and construction of a federal judiciary office building at Massachusetts Avenue and Second Street NE.

David Perry, a member of the Stanton Park Neighborhood Association who leads its land use committee, hailed the Union Station development as "good for the city and good for the tax base."

Perry, a nine-year resident of the area who lives with his wife and their 5-year-old daughter at 644 E St. NE, argues that a far more "insidious" threat to Stanton Park is the steady influx of trade associations and other organizations that have purchased residential property near the Capitol and converted it to offices in violation of D.C. zoning laws.

"It's always cheaper for firms to buy residentially zoned buildings than ones zoned for offices," said Perry.

"But it distorts the market ... and leads to a kind of erosion of the neighborhood over time."

He and other community activists, who are proud of the racial and economic mix of the area, also said they are worried that commercial development and real estate turnover around Union Station and further north along the H Street commercial corridor might gradually drive out low-income residents.

Perry and his wife, Sarah Campbell, a private consultant on transportation, are part of a core of area residents who are committed to improving a neighborhood that for many years lived in the shadow of the more prosperous and sought-after area of Capitol Hill, south of East Capitol Street near the Eastern Market.

"There is a small town feel to the area," said Perry, who grew up in Cleveland Park.

"To me, it would be a tremendous loss if that were to disappear ... . I hope it doesn't become a 'groovy' place or 'the place to be.'"

For all its progress, the area has its problems, including a shortage of grocery stores, dry cleaners, drug stores and convenience shops.

And, like many other inner city neighborhoods, Stanton Park has a high crime rate, with burglaries, robberies and purse snatchings.

"I wouldn't say in all the time I've been here that the concern about crime really has been reduced," said Tom Fenske, a Stanton Park community activist who has lived in the area since 1976.

"All too many people are broken into or robbed in the street. It's something people think about and worry about all the time."

Residents who live near the Ludlow-Taylor Elementary School, near 7th and G streets NE, complain that drug trafficking has become a serious problems in a neighborhood that was once relatively free of crime.

"I'd like to see them clean it {drug trafficking} up so kids could come out and play again," said a 37-year-old printer who grew up in the area.

"I hope all this development creates jobs for kids hanging around with nothing to do."

Stanton Square, a small park and garden formed by the intersection of Maryland and Massachusetts avenues NE, is the most enduring landmark and gathering spot in Stanton Park.

The square appeared in the 1792 drawings by Andrew Ellicott of Pierre Charles L'Enfant's plans for the capital city.

It was named for Edwin M. Stanton, Abraham Lincoln's foul-tempered Secretary of War. Yet the equestrian statue on the square honors Nathanael Greene, a Revolutionary War general.

The neighborhood, with its distinctive Victorian style row houses, wrought iron fences and narrow, tree-lined streets, abuts the Supreme Court building and Union Station.

The area is rich in history, boasting such prominent structures as the Frederick Douglass House, built in 1870 at 316 A St. NE, and the Belmont House at 144 Constitution Ave. NE, which was burned by the British in 1814 and later restored.

The 40-block area has been in the throes of episodic transition, restoration and gentrification since the early 1950s, when whites abandoned the area for the suburbs and other parts of the city.

While restoration and redevelopment have swept other areas of the city, such as Dupont Circle and Foggy Bottom, change has been incremental in Stanton Park.

The neighborhood varies almost block by block. Some streets are lined with elegantly refurbished row houses and office buildings; others with ramshackle houses, boarded stores and weedy lots.

A decade or more ago, as middle- and upper-income families began to return to Stanton Park in significant numbers, real estate speculation and renovation largely centered on the area between East Capitol Street and Maryland Avenue. Slowly that activity has moved north toward G and H streets.

Developers and community activists point to five apartment building and town house projects under construction as a sign of a neighborhood on the upswing.

The neighborhood includes a large number of black families who have lived there for generations, a much smaller group of mostly white, middle-income professionals who moved to the area within the past 10 to 15 years to raise families and a recent wave of Yuppies who enjoy the convenience of living on Capitol Hill.

A major turning point for the area, beginning in the late 1970s, was the sprouting of trendy sidewalk cafes and restaurants, including the American Cafe and La Brasserie in the 200 and 300 blocks of Massachusetts Avenue.

Now developers are taking a first major step toward redeveloping the dreary, riot-torn H Street commercial corridor.

Real estate agent Don Denton said the boom in the neighborhood has been helped by perceptions of Stanton Park as a stable area, where homeowners outnumber renters 3-to-1. "That makes a substantial difference" to potential buyers, he said.

Calvin Cheek, a black employe at a D.C. mental health center who has lived with his family on F Street NE for more than 20 years, said Stanton Park gradually has become a safer, more pleasant place to live.

"Years ago, it used to be pretty rough down here," Cheek said while washing his car in front of his home.

"Some of the kids called it 'Dodge City.' Now, it's just better all the way around."

J.W. Lanum, a black D.C. government worker who lives with his wife, Edith, and their 2-year-old daughter at 407 Constitution Ave. NE, said Stanton Park "is the kind of place where people get out and mingle.

"There's a real sense of neighborhood. It's different than Logan Circle, where I used to live, with its traffic, prostitution and drugs."

Neighborhood residents joined last year to defeat a city proposal to convert an old police station on 9th Street NE into a minimum security jail.

They also launched a drive that raised more than $20,000 to purchase state-of-the art playground equipment.

And, in a major turning point in stabilizing the community, the local Parent Teacher's Association worked with the school board to devise a cluster system of three schools, for prekindergarten through the eighth grade, that is among the best in the city.

Last week, after completing a whirlwind house-hunting tour of the city, Ira and Robin Richardson declared that Stanton Park is "the closest thing to a neighborhood we've seen."

The Richardsons are a husband and wife team in the Army who will be stationed in Berlin for the next three years.

They are buying a house near 3rd and H streets NE as an investment until they are reassigned to Washington.

"We think it will be a real neat place to live in three years from now," Ira Robinson said.

"We hope to have a family, and this is where we want to have it."