A 19th-century German village prospers in Columbus

One taxi driver here tells his riders he can't imagine why anyone would pay exorbitant amounts of money ''to live three feet from his neighbors in a small house with no yard.'' Even at slow speed, his tires flutter loudly over cobblestone and brick streets that are nearly impossible to plow in winter.

There are gnarled brick sidewalks as well. People moving in ''don't know that they have to pull the weeds between the bricks on the paths,'' says a disgruntled former resident. She moved away because she became disenchanted with cleaning up after neighbors' dogs and being unable to find a parking space. The Germans who squeezed these 1-, 11/2-, and 2-story ''Dutch houses'' onto 30-by-90 -foot lots didn't need garages in the 1800s.

And it's the tourists who take the parking places. Behind the taxi is one of the omnipresent tour buses that shuffle them down the narrow streets. They ogle the quaint brick and clapboard houses with ''six-on-six'' pane windows and fish-scale slate roofs with gables and chimneys. Above the windows and doors are ornately carved lintels. Street lamps of 19th-century design give the feel of Europe 150 years ago.

They're looking at German Village, which, according to its residents, is the second-most-popular tourist attraction in the area (Ohio State University is first), and the world's largest private restoration of its kind. What the latter means is that homeowners here have so far rehabilitated 1,100 of nearly 1,700 homes all on their own, without a dime of government money or involvement - a fact they're all very proud of. In 1975, fifteen years after rehabilitation began in earnest, the area was listed on the National Register of Historic Places.

The visitors disembark to peer through wrought-iron fences into small windows or tiny gardens and grape-arbored courtyards. One woman, tired of curiosity seekers peeking in one of her front windows, put up a sign: ''Other Window, Please.''

Once slated for slum clearance, these 233 acres have undergone constantly accelerating rehab that began about 1950. The tourists and parking problems which that activity brought are seen as bad news by some residents. But the good news is that from 1962 to 1982 the average fair market price of homes has increased by 538 percent, while many other inner-city neighborhoods have been on the decline.

And there are more than a few stories about owners getting $100,000 today for what they paid $6,000 for two decades ago, according to Shirley Kientz, full-time secretary of the German Village Society. The organization was set up in 1960 to oversee orderly development after founder Frank Fetch rounded up about 50 concerned residents. ''And it's not unusual for homes in the village to sell for $200,000,'' she says.

Just a 10-minute walk from downtown Columbus, the area is proof that middle- and upper-income residents will flock to center-city neighborhoods if they find the location livable as well as convenient, urban experts say.

It is perhaps the ideal small-home market for Columbus's service-based economy; a significant pool of office workers are employed within walking distance.

German immigrants started settling in this poor south end of town in the early 1800s bringing with them their penchant for small, well-built, well-kept homes.

By the late 1800s and early 1900s, apartment rows, 21/2-story homes, and commercial buildings began to appear. With them came patterned brick streets and alleys, sidewalks, and wrought-iron fences. Larger homes, built near the turn of the century around 23-acre Schiller Park, reflect the Americanization of the German residents - houses there tend to be Victorian and Italianate, with more elaborate windows and lintels and larger lots.

By 1890, nearly 7,000 Germans lived in the community, and it was still growing and prospering. Educational clubs and family organizations flourished; there were festivals, social events, dances, and, of course, the famous beer gardens. All these were transforming the country immigrants who fled Germany's feudal social system into the properous urban Germans they had aspired to be. By all accounts, it was a content, unified, and stable community that included singing and athletic clubs, Lutheran and Roman Catholic churches, businesses, and German schools.

In keeping with the Germany they left behind, houses were built close together and close to the street with living rooms in front. Large kitchens faced gardens in back. Prevailing were the ''cottage-look'' single- and two-family homes built of reddish-orange sand-molded brick, with cut-limestone steps, lintels, and foundations.

''It is true,'' wrote the area's German-language newspaper, ''that if you first look at the houses of rich people and then come through the southern part of town, you could find the houses of the German people to be small and more or less poor in comparison.

''It is interesting, however, that the people who live in these small houses work very hard and yet keep their houses very clean. You will not find silver on the doors, but you will find many little gardens which produce the vegetables for the city market. You will not find silk or other very expensive things; but . . . the people are very healthy, and they are very happy.''

But World War I brought anti-German sentiment. The language was banned in the schools, books were burned in protest, and city council changed the names of the streets: from Schiller, Kaiser, and Bismark (sic) to Whittier, Lear, and Lansing.

Prohibition in the 1920s hurt the village by destroying its beer gardens and brewing industry, the mainstay of both working and social German life. Many of the most prominent Germans moved to other areas of Columbus where they would be less noticed.

The area steadily declined until three studies between 1953 and 1956 recommended complete clearance and redevelopment.

But just before this, in 1949, Frank and Elnora Fetch had bought a brewery corncrib to restore and rent for income after they retired. When they finished they were so pleased that they moved in, developed an appreciation for the local architecture, and restored two more properties in 1953 and 1958. When a local newspaper feature brought hundreds of aspiring followers, Fetch formed the nonprofit German Village Society, for the ''preservation and restoration of the property in the German Village area and the retention of its charm and Old World atmosphere.''

Today, the strongest remaining German influence is the architecture. When the area was declared a local historic district in 1960, a German Village Commission was formed to advise and approve all restoration within the newly defined borders. This ensures the characteristically romantic look and feel of the area.

''With the commission, everyone has to adhere to certain qualifications, certain specifications,'' says Marie Warren, a charter member of the commission. ''That's what keeps them in line. Once in a while we get somebody who wants to go ultra-modern, sneak in a skylight or something or other. Then the commission has to thumbs-down the idea and keep it within the original qualifications.'' The commission meets once a month to consider applications for building additions and rehabs. Recently it banned the sandblasting of brick, found to etch off protective enamels that keep the houses stronger longer.

Of 1,700 dwellings, 100 are commercial - most notably German restaurants: Schmidt's Sausage Haus, Juergen's Backerei and Konditorei (bakery and confectionery), Bavaria Haus, Deibel's. Many follow the German tradition of a business downstairs and residence upstairs.

But beyond the restaurants and the architecture, what's the remaining German influence? ''It's not German at all,'' says Fetch. ''We kept the name because of the architecture, almost identical to the homes their builders left behind in Frankfurt, Stuttgart, and other cities.''

Eva Trott has lived in the village all of her 81 years and remembers the Germans: ''One of my three sons married a German girl, and there's still quite a few older Germans here. But I've long since lost the German I knew. Those German people, they'd sell their houses and they'd go back to Germany.''

The long-term outflux of Germans has brought the area what William Scheurer, another commission charter member, termed an ''exotic mix of every nationality you can think of'' - elderly, young families, doctors, artists, writers - and lawyers.

''This place is overrun with lawyers,'' says Fred Holdridge, newly elected president of the German Village Society. The commission is concerned that lawyers are turning homes into offices, commuting for the day and then leaving the residences empty and dark at night. The society prefers live-in owners, in order to keep as much of the community feeling as possible.

''It is very definitely not a self-contained community though,'' says Mrs. Kientz, who says residents must leave the area for everything from movies and plays to shopping and libraries. ''I will very definitely shop here first,'' she says, embracing the many fine gift, antique, and book shops, ''but for most things I find I have to go elsewhere.''

And, as with many large-scale architectural revivals, not everyone is thrilled with the added attraction of being the ''in'' place to live in Columbus. With tourists have come trash, noise, and the displacement of shops serving residents by shops catering to tourists.

But for the most part, the residents as well as the surrounding city citizens are elated with German Village's progress. They are proud and possessive of the small community.

Many elderly residents echo the sentiments of Eva Trott, who was born on City Park Avenue in 1901. ''Some of the people seem to hate it (development) awful bad,'' she said. ''But it's wonderfully improved, and I find the tourists friendly and interested in me and my house. I have lots of friends in the village, and not any of us'd ever live anywhere else.''