An eye on the future.

Making predictions in print for the year ahead is risky; the written forecast will be on the record to check against what finally happened. Nevertheless, since the REBNY keeps a close watch on the market and the policy issues that its prosperity, we'll take our chances and make some reasonably educated guesses about what 1997 holds in store for the real estate industry.

Housing issues will certainly preoccupy New Yorkers. The Emergency Tenant Protection Act expires in June. This year, the debate over its extension will be even more intense and complicated then usual.

While some will make their customary call for renewing rent regulations in their current form, a difference of opinion exists between those who would scrap the system more or less immediately, and those who argue for a gradual transition to a free market without government controls.

The political realignment in Albany, however, indicates that significant changes in the rent regulations are very possible. It seems likely, for example, that the household income and rent standards for decontrolling luxury-price apartments will be tightened again. REBNY wants to see the most flagrant abuses in this regulatory system curbed and eliminated as soon as possible.

New York's dismal rate of housing production - especially middle-income and low-income residential development - is another serious policy matter. REBNY succeeded in winning restoration of 421-a benefits for residential buildings with a floor area ratio of 15 or higher. Those incentives lapsed in October of 1996. To spur the creation of mere dwelling units, the Real Estate Board will recommend that 20-year tax abatements be given for 80/20 housing certificates earned for building or renovating low-in-come residences off site. This approach could draw capital toward upgrading the city's stock of low-income housing. This reform could also speed rehabilitation of the vast universe of in rem units now being operated by the city.

Another dividend of extending the 20-year tax abatement, of course, would be the stimulus to build market-rate housing. Every unit counts and every kind of unit is needed to meet the needs of this enormous metropolis.

Low inflation, low interest rates, a cheap dollar and the city's record-setting success in reducing crime have all helped New York's economy to grow again. From tourism to information technology, from the expansion of international business services to the arrival of major retail outlets, from Wall Street to the Upper West Side, we expect the economic recovery to keep rolling in 1997.

That prediction is even likelier to come true if the city comes up with a way to promote rational office development. The market has an appetite for such space. The Durst Organization's project at Four Times Square has proved that large blocks of desirable Midtown space have plenty of takers. Will the proposed rezoning of Eighth Avenue, where Jack Resnick & Sons will soon break ground for an apartment house, provide receiving sites for unused air rights from the Theater District? REBNY believes that such a mechanism is essential to keep Midtown's renaissance moving west, and provide capital for financially distressed Broadway houses.

As the Real Estate Board moves into its second century, we look ahead with confidence.