Real estate experts expect 2007 to exceed this year’s record-setting mark of about $21 billion in construction spending in New York City.

While a spike in residential construction drove recent record-setting years, real estate experts say the next wave of the building boom will be driven by office projects and unprecedented public spending on infrastructure and transportation. It is the next phase in a historic building boom — spurred by low interest rates, a healthy economy, low crime, reduced taxes, and zoning changes — that is reshaping the city’s skyline.

The deputy mayor for economic development, Daniel Doctoroff, said yesterday that when all is counted, construction spending will have increased by about 5% in 2006. He predicted it will continue to expand in 2007, 2008, and 2009.

“It is touching every segment of the construction industry in every part of New York, and I think it is just accelerating now,” he said.

According to the U.S. Census Bureau, the number of building permits issued in 2006 for new privately owned residential buildings in New York City is on pace to reach last year’s number of about 31,600 units, more than three times the amount issued 10 years ago. In 1995, the city issued 5,135 permits, and in 2000 it issued 15,050 permits.

Mr. Doctoroff said that in 2007 he expects a “leveling off of the market” for residential development, although he doesn’t expect New York housing construction to fall off as much as it has elsewhere in the country.

“As a percentage, commercial work and public work is a slightly greater percentage of the total than it has been, and residential would be a little bit smaller,” Mr. Doctoroff said. The public sector investment, he said, would create the conditions for increased private sector spending.

Still, it is the private sector development whose speed is breathtaking, with entire large buildings seeming to rise in just a year.

A year ago, the building site at the corner of Chambers and West streets was seemingly dormant behind wraparound fencing. Next month, the developer of 200 Chambers St., Jack Resnick & Sons, is aiming to open the 258-unit, 30-story glass building for occupancy. More than 85% of the units have been sold, at prices averaging around $1,300 a square foot, according to managing director, Dennis Brady. The project, he says, has been exceedingly lucrative.

“The project made sense at $1,000 a square foot,” Mr. Brady said.

Still, Mr. Brady said that in today’s market, it was uncertain whether the same project would be developed again, based on high land costs and rising construction costs.

“There are a number of developers that have delayed projects or pushed them back based on where they see the numbers going these days,” he said.

The president of the New York Building Congress, Richard Anderson, said construction spending in New York City in 2006 would exceed $21 billion, and he predicts spending in 2007 will be even greater. Five years ago, total annual construction spending was about $15 billion.

“The demand for New York City is at an all-time high,”Mr. Anderson said.”It is the strongest demand of any city in the world.”

Between 50% and 60% of annual construction spending is taxpayer money funneled through the public sector into infrastructure and transportation projects, Mr. Anderson said.

“The public sector — outside of the 1930s — has never spent as much money on infrastructure as it is today,” Mr. Anderson said. Among the projects under way or well into planning is an extension of the no. 7 subway line, the reconstruction of the Fulton Street transit hub, and site preparation at ground zero.

Full funding of public capital plans is a question mark for some government agencies, such as the Metropolitan Transportation Authority, which could come under pressure to reduce their project expectations if they are caught in a budget crunch.

“It is a balloon — it won’t necessarily pop, but it could lose some air,” Mr. Anderson said. “The grand plans will be under pressure.”

Relatively low interest rates and big donations from the record year on Wall Street are also pushing institutions, like universities and museums, to build, he said. New York University continues to expand, and Columbia University has a large expansion in the works. The Whitney Museum is seeking to expand downtown.

“Every organization feels the pressure to have its largest capital program ever,” Mr. Anderson said. “If you are a non-profit without an ambitious capital program, your board is not doing its job.”

The president of the Building Trades Employers’ Association, Louis Coletti, said most of the contractors he represents have a two or three-year backlog of projects. He said this is the busiest time during his 25-year career in construction. Because the market mix includes a high percentage of infrastructure and transportation projects, Mr. Colletti predicts the construction boom will continue as the public sector lays the foundation for more private sector development.

“This is the beginning of one of the largest and longest construction booms we have seen in many, many years,” Mr. Coletti said. “Most of the union trades I’ve spoken with are at or near full employment today. You will see an acceleration of work in the springtime when a lot more projects will put shovels in the ground.”

The construction boom has set off a transformation of neighborhoods across the five boroughs. Critics say the prolonged growth period has damaged the character of some neighborhoods, and created dangerous construction conditions. They say the city’s oversight mechanisms are under-equipped to handle the increase in building.

A City Council member from Queens, Tony Avella, said he would not attend the popular annual banquet hosted next month by the Real Estate Board of New York, the powerful lobbying group representing the real estate industry. Mr. Avella, a Democrat, said that even in a period where the industry is making a lot of money, it has have resisted reforms aimed at increasing oversight and close zoning loopholes.

“Obviously a construction boom is good in many respects. Unfortunately there is an aspect of it that has really been undermining the very nature of neighborhood life in this city,” Mr. Avella said. “We can no longer just have business as usual when in fact we are in a crisis mode. Not enough people are paying serious attention to overdevelopment and unsafe construction.”

But for construction companies, real estate brokers, and those living and working in the newly constructed buildings, the building boom under way during the Bloomberg administration has had its benefits. And for all New Yorkers, it is changing the face of the city in ways that will be seen for years to come.