Reagan task force unveils plan to boost jobs, housing in cities

From five to 15 of the most decaying, desolate slums in the United States are being considered by President-elect Ronald Reagan and his advisers as sites for their initial efforts to revitalize America's inner cities.

One of the keys to that revitalization is the establishment of private sector "job zones."

John McClaughry, a senior domestic policy adviser to Mr. Reagan who served as a special assistant for community affairs to President Richard Nixon and as a Carter appointee to the National Commission on Neighborhoods, says initial implementation of the program will be done by administrative fiat.

"I want to try it first in the field" before legislation action is aggressively pushed, he reasons. The idea is being tested in seven sites in England and will be implemented shortly after Mr. Reagan's inauguration.

The concept behind these job zones -- which could encompass from five to 500 acres -- is embodied in the Urban Jobs and Enterprise Zone Act, now facing an uncertain future in Congress.The bill is sponsored by US Reps. Jack Kemp (R) of New York, a top Reagan policy adviser during the presidential campaign, and Robert Garcia (D) of New York, whose district includes a hefty chunk of the South Bronx.

But the measure, which calls for federal income tax, capital gains tax, and social security tax breaks for companies that locate in these depressed areas, is not expected to pass this session.

Mr. McClaughry says that if the initial development zones are successful, the Reagan administration is likely to submit its own version of this urban development bill.

Businesses already located in slum-ridden areas and agencies charged with the responsibility of locating more firms in these areas appear eager to try this approach.

Edward J. Logue, director of the South Bronx Development Office, jointly financed by the federal, city, and state governments, says that such a policy would streamline the process of federal approval for industrial development zones. "Now the federal government doesn't have any one person to which you can go," he says.

Benjamin Cohen, co-owner of Petco Inc., a new light industrial manufacturer of plastic bottles in the South Bronx, would welcome the tax breaks the Reagan initiative includes.

McClaughry is quick to point out that this policy is not just another "federal handout," adding that large investments of federal money in inner cities in the past have not produced proper results.

He stresses that although the Reagan policy will have special monetary incentives, it also will depend heavily on local communities to shoulder their share of the burden of revitalization.

The philosophy of local communities shouldering their share of the burden of revitalization was woven throughout Reagan's urban task force proposals, the details of which were released Nov. 20. The group's other proposals include:

* Phase out public service jobs and rely more on tax and other business incentives to create jobs.

* Replace targeted federal grants where possible with bloc grants, allowing state and local governments to use the money as they see fit.

* Divert some percentage of taxes that now go to Washington to state and local governments.

* Replace subsidies for low-income housing with vouchers to allow the needy to rent any housing they choose in the private market. Federal aid to localities would in general be conditioned on their abolishing rent control. Replace subsidies for interest payments with subsidies to reduce the principal an aid recipient owes on his mortgage. As an incentive to finance more housing, allow an income tax deduction on the first $1,000 in interest on savings.

* Reduce the minimum wage for youngsters under age 19 to give employers more incentive to hire youth.