PERSPECTIVE ON URBAN AMERICA : Old Cities: Pearls Worth Polishing : Preservation of once-vibrant downtown cores profits the civic soul as well as the tax coffers.

As the Clinton Administration prepares to create a new urban policy, it need not start from scratch. Strategies already exist that can be incorporated into an effective program to revitalize America’s cities.

While no one has all the answers to inner-city problems, experience has taught us these lessons:

- The quick-fix solution does not work; but incremental, building-by-building, business-by-business reinvestment does.

- The wrecking-ball approach does not work, but rebuilding neighborhoods through the rehabilitation of sound existing buildings does.

- Solutions imposed from outside the community normally do not work, but revitalization that involves the community in bottom-up solutions does.

- Trying to re-create the inner city as a carbon copy of a suburb does not work, but building on the unique physical and cultural resources of a community does.

The urban fabric, which history has taken many years to weave, gives our cities their unique identities, their personalities and their sense of place. Every inner city was once a thriving, vibrant community with new buildings under construction. Many of these buildings remain, and they should be the base upon which new development builds. New development should respect the scale, setbacks and especially the splendid grid of streets that characterized American cities early in their development.

We have learned that preservation of the existing urban fabric needs to be an integral part of community revitalization, not for aesthetic, historic or architectural reasons, but because it works.

Preservation creates jobs. Every $1 million invested in rehabilitation creates five more construction jobs and three more permanent jobs than the same amounts invested in new construction. Moreover, this kind of work offers job-training opportunities for unemployed young people, gives them a stake in their community and provides them with a chance to develop long-term skills and earning power.

Preservation saves money. A recent Rutgers University study found that preserving cities and containing sprawl could save the state of New Jersey about $1.3 billion in capital infrastructure costs and 30,000 acres of prime farmland by the year 2010. It is far less expensive to upgrade and use our existing public infrastructure than to create new systems beyond the edges of the city to support high-risk marginal housing subdivisions that frequently plow under scarce open space.

Preservation stimulates the economy. According to the Department of Commerce’s model for measuring the economic impact of 39 categories of economic activity, rehabilitation is the only category that is in the top 20% in all three measuring criteria--increase in household incomes, number of jobs created and overall impact.

Preservation tax incentives work. The federal government has verified that its program of tax incentives for historic rehabilitation has been one of our most effective and successful urban revitalization tools. Roughly 23,300 projects to rehabilitate historic buildings have been undertaken in the past 15 years. The completed projects, representing $15 billion in private sector investment, have brought renewed life to deteriorated business and residential districts. They have created jobs, increased local and state revenues and helped to ensure the long-term preservation of irreplaceable cultural resources. Nearly half of the projects have produced affordable housing.

Unfortunately, since enactment of the Tax Reform Act of 1986, the level of investment generated by the historic buildings program has declined by 75% since its peak of $2.4 billion in 1985. The rehabilitation tax credit should be restored as a key component of an urban revitalization program.

Preservation stimulates and nurtures business. Restored and recycled commercial and industrial buildings can be magnets for new business endeavors, ranging from retail shops to start-up manufacturing businesses, providing long-term jobs for minority and other inner-city residents. The Main Street program of the National Trust for Historic Preservation has provided economic consultation to facilitate the reuse of older buildings in more than 700 towns and cities in 34 states over the past 12 years. Many of these are communities that found their Main Streets decimated by suburban shopping center developments. They have remade themselves successfully by building upon the resources that remained. The result: more than 20,000 new businesses and 60,000 new jobs. Main Street programs generate more than $19 in new investment for every $1 spent.

Preservation builds community spirit. Preservation is not just a matter of bricks and mortar but of human values as well. When a neighborhood is saved and renewed instead of being bulldozed, its residents develop pride in their community.

Programs preserving older and historic buildings to revitalize commercial centers have been successful. They contain critical components of an effective strategy to deal with our cities. And they restore hope and foster livable communities. Congress and the Clinton Administration should make them the cornerstone of a new urban agenda.