mid to late 70s ABC showed "Terraces" a made for TV movie with Julie Newmar. 3 loosely connected story lines re. tenants in an apt building in LA (had to be West Hollywood).
One of the tenants is a young gay man who is having an affair with a somewhat older married man. They end up happily together.
I don't think it was ever shown again.
Any others remember seeing this?

No, only Cliff (the youngest brother--there are 3) was gay. The middle brother was "regular" and accepting, while the oldest was a stereotypically "manly man" who made all the ignorant homophobic comments. Donald was the sissy friend, but he did often have "words of wisdom" in serious moments. I'm glad this show is available, horribly dated as it may be, because it really WAS exciting to see a gay character with anything at all like a "normal" personality on TV, even it it was Showtime. This one often gets forgotten by the annals of history, so thanks to the OP for remembering it.

What makes Milton Berle, notoriously heterosexual and in showbiz all his life, think being mistaken for gay could be more than a silly joke?

It is as bad to pose as a thing as to be the thing itself, according to the marquess of Queensberry, the man who, ironically, invented the concept of not hitting below the belt, in his 1895 attack on Oscar Wilde. The marquess was covering his losses. If by some chance he couldn't prove that Oscar was a "somdomite" (his own spelling)--and thereby get at Wilde legally--he could at least wound him socially by accusing him of ...

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Everyone but one person on Bewitched was gay. Even though it wasnt technically a gay show. It was pretty gay though.