Developer Anthony Natelli is "rethinking" his proposal to give Montgomery County at least $4 million to exempt him from a county requirement to build 60 moderately priced homes among the luxurious houses in his exclusive Avenel development in Potomac, according to Richard Ferrara, the county's housing and community development director.

The money from Natelli would be used to construct an apartment building on county-owned land in downtown Bethesda, with rents ranging from $400 to $700 a month, far below the average for the area, according to Ferrara. The building would have from 90 to 110 units, he said.

But the developer's offer has touched off a controversy, drawing criticism that too much of Montgomery's moderately priced housing already is located in the eastern part of the county and that the wealthier communities in western Montgomery, such as Potomac, have not taken their share.

Other critics said the county's law that requires integrating residents of all income levels in Montgomery communities is too important to tamper with.

"This isn't just a decision on costs and benefits," said Allen J. Lichtman, an American University history professor who lives in Bethesda. "There's a higher purpose of the law that has made us a model for the country." Ferrara and Natelli "should be thinking along the lines" of helping people without abandoning the concept of mixing economic groups.

Ferrara said he and Natelli are discussing "the possibility of looking for alternatives" to the developer's proposal, which had already been endorsed by a number of county officials, including County Council member Neal Potter, who this week won the Democratic nomination for county executive. Several officials said the offer of more low-cost units in an area where they are badly needed was almost too good to be refused.

Now, Natelli and Montgomery officials hope to find an alternative that does not look like "a buyout" of county requirements, Ferrara said. The county has given Natelli's original proposal "a good deal of airing," he said, adding that "we don't want to end up damaging the MPDUs down the road."

Montgomery's widely praised Moderately Priced Dwelling Unit program, known as MPDU, says a development with more than 50 units must contain some homes moderate-income buyers can afford. A major goal of the program is to avoid concentrating low- and moderate-income families in a few neighborhoods.

Natelli's Avenel housing and championship golf course development was supposed to contain 107 such units, but the developer negotiated a reduction to 60 units when Avenel's construction was being planned. For more than a year, he and county officials have held informal discussions on his offer to give the county money instead of houses at Avenel, according to Ferrara.

The cheapest town houses in Avenel will cost around $400,000 to $500,000, but if the units for moderate-income buyers are built they will be priced at about $75,000.

High monthly homeowner association fees, however, cannot be reduced because they must pay for maintenance and services the organization provides for all homes, Natelli said in a recent interview. The homeowner fees and lack of public transportation in the Potomac area have been cited as reasons for not housing moderate-income families at Avenel.

To qualify for the lower-priced town houses, if they are built, buyers must have incomes no higher than $36,000 for one person and up to about $40,000 for a family of five or more people.

Natelli did not respond to a request for an interview.