City needs real estate and economic incentives.

Increasingly, real estate and building market observers, and many government officials, have been pointing out that government must take on the role of catalyst if the construction community is to be put back to work and the city achieve economic growth. I agree.

I was pleased to read that the City Council had passed a bill extending tax breaks to developers who build in midtown Manhattan as a way of stimulating the city's construction industry. Mayor Dinkins backed the bill and it passed 39 to 8. It will help.

The fact is that the construction industry is an engine that can drive the city's economic growth: Every $1 of construction activity in New York City creates $2.15 of income activity in the region, and every $1 of public investment creates $4 in private investment. Will it pay to prime the construction industry pump? Of course.

Because of this we are urging the city to adopt several innovative proposals put forward by the real estate industry that are designed to accomplish this type of stimulus. For example, the city should facilitate the conversion of older office buildings to multi-family use. Because of the high rents that would be necessary, it just isn't economically feasible to upgrade these buildings and retrofit them for modern office usage. But it would be economic to convert them to apartment houses, and the city needs housing.

The proposals to encourage conversion of offices to apartments include lowering a building's assessment in keeping with a residential use and phasing in a higher assessment over a 10-year period. Only buildings that have had a 20 percent vacancy rate or more for three years, or are 50 percent vacant at the time of conversion would be eligible, and the apartments would be subject to rent laws for the 10-year period.

Another real estate proposal to expand construction industry activity includes an annual $250 commercial rent tax credit for each city resident employed by a corporation that stays in the city. Hopefully, this also will encourage city tenants to expand as they hire more people. The expansion in turn will foster building renovations to accommodate the new employees.

Another way to encourage city employers to expand their employee base is to provide those companies who sign a 10-year or longer lease here with a city and a state tax credit for each city resident they employ. The credit, as much as $1,000 each from the city and the state, could become effective only after a certain number of years to insure that the recipient meets the programs terms.

The Building Congress has been urging job-creating programs ever since the recession started in an attempt to deal with the 50 percent-plus unemployment rate our industry has been experiencing. Frankly, the time to put such plans into action is long overdue.

That's why we also fully support Governor Cuomo's intention to accelerate the pace of the state's $32 billion "New, New York" program involving tax incentives, and development and repair of homes, roads, libraries, schools, waterfronts and laboratories for which, he said, the funding and the authorization is in place.

The governor noted that to create as many construction jobs as possible this construction season he plans to reduce the real estate gains tax for projects in which construction starts before the end of 1995;; use the SONYMA Mortgage Insurance Fund to facilitate mortgage financing for new housing, health care projects and rehabilitation efforts; provide new SONYMA loans to stimulate housing construction in a financing offer that requires only a 2 percent down payment and a one point closing fee if the loans can close in 240 days; boost transportation construction by 46 percent for an increase of $400 million provide $10 million for prison construction and rehabilitation projects; speed up construction at SUNY campuses by $20 million; and "fast track" construction approvals for job-creating projects so that permit applications can be processed within 45 days.

These are the measures we believe are necessary to get the construction industry back to work - incentives in the private market and an increase in public construction activity. Can we afford all this? Yes, because these proposals will create jobs and jobs will create income taxes and sales taxes. And they will help to keep businesses and working people in the city.

(The New York Building Congress is a non-partisan, 73-year old public policy coalition of business, labor, professional, association and governmental organizations representing the design and construction community. Its 500 corporate, institutional and labor union members comprise some 150,000 individuals.)