South of Metropolitan Avenue between Bushwick and Union Avenues, rows of wood town houses are home to a small, stable, middle-class Italian-American community. A one-family house there costs about $150,000; a two-family between $200,000 and $250,000. THERE are no residential lofts on the waterfront, which is zoned for manufacturing. Instead, many artists who occupy the waterfront area north of Grand Street live in apartments in brick row houses and rent separate studios. Rent for a 2,000-square-foot artist's studio is about $750, according to Lori Ledis, an art dealer and artist based in Williamsburg.

Most of the artists came seeking large work spaces and hoping to escape SoHo prices, Miss Ledis said. In addition, ''they come to get away from the hype of the Manhattan art scene and to get serious about their work,'' she said. ''They don't need to be seen at the right openings.'' There is no gallery in Williamsburg, so Miss Ledis often has shows in her own duplex for the artists she represents.

Williamsburg itself provides inspiration, too. ''Empty buildings amazed me in my early work,'' said Miss Ledis. The expansive loft space has allowed Williamsburg's sculptors to pursue larger subjects.

Although the northern waterfront area tends to be deserted at night, residents say that they feel safe.

Williamsburg is a high-crime neighborhood, but crime tends to be concentrated in the area south of Grand Street and north of Broadway between Bushwick Avenue and Berry Street, according to Maurice Lichman, a civilian who is director of community affairs for the 90th Precinct. There were 14 fewer reported felonies in 1985 than in 1984, down from 6,455, and 6 fewer murders, down from 26.

The gangs that gave Williamsburg its dangerous reputation during the 70's ''have quieted down for about three years,'' Mr. Lichman said.

Many Wiliamsburg children attend P.S. 84, the Jose Diego School, which has 1,041 students from pre-kindergarten to sixth grade, or P.S. 380, the John Wayne Elementary School, which has 700 students from pre-kindergarten to fifth grade as well as an annex for multiply handicapped children. The community also has three Roman Catholic parochial schools, Most Holy Trinity, Our Savior and St. Peter and Paul.