When Toronto put stiff limits on local construction in the mid-1970s, it brought an abrupt halt to a building boom than many residents of the Canadian city felt was getting out of hand. So what's happening? Construction in Toronto is booming again.

Some $600 million of building is going on in downtown Toronto where this year about 2.6 million square feet of office space will be added. More than 1,200 luxury condominium units are also being built. And near the financial district, a $40 million center for the performing arts is going up.

But now developers have to adapt to regulations that prevent them from doing what they did in the late 1960s. Then, they ran wild in the city, razing older buildings and blotting out neighborhoods to make way for steel and glass skyscrapers that were crowded by day but desolate by night.

The first move against the developers came in 1973 when Toronto set a 45-foot height limit on new buildings. That gave the city time to consider its future development and to come up with an official building plan in 1976. Under it, developers of commercial projects are encouraged to put them in outlying boroughs where restrictions are less severe. Those in the downtown area must be balanced with residential units, and the more developers create a habitable environment -- with open spaces, for example -- the more leeway they have in construction. They also get a break if they incorporate older buildings into their plans rather than tearing them down.

Meeting the new requirements can be tough. Bell Canada, which is putting up a large office complex next door to city hall, faced some 50 restrictions on its plan, including one that barred the building from casting a shadow on a nearby church. At the last moment, the city ordered a change in the structure's facade so it would blend better with surrounding buildings.

John Bryan, executive officer of the Toronto Redevelopment Advisory Council, a lobbying group representing large property owners and business, says construction under the city guidelines is "very expensive" and cautions developers to "find a good lawyer and planning consultant" before approaching the city with a project. He says, for example, that density restrictions for a purely commercial project downtown limit office floor space to eight times the amount of land involved.

But the plan is flexible. And pentup demand for new construction, which has doubled land prices downtown in the past three years, has made developers eager to cooperate to get their projects approved. Fidinam Corp. of Switzerland, for example, is renovating the old Confederation Life Insurance Co. building, a 19th Century, eight-story Gothic redstone structure. The second phase of the $100 million proposal calls for a new building behind and above the old one. By incorporating the historical building in the proposal and including a few floors of residential space, Fidinam has been permitted to put up a 37-story building.