Here are five of the most intriguing Opportunity Zones articles from the past week or so. Several articles, notably the big New York Times piece from August 31, were critical of the OZ program and how little it has helped low-income communities so far.
How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich (New York Times)
It’s not every day that the New York Times runs a front page story on Opportunity Zones. Jesse Drucker and Eric Lipton characterize the Opportunity Zones program as a “once-in-a-generation bonanza for elite investors.” The article rightly points out that many Opportunity Zones projects were underway before the legislation was passed, and do little to benefit low-income communities.
Although the article is largely critical of the program, it does point out that money is flowing into some needy communities, specifically citing Birmingham and Erie. And EIG president John Lettieri warns that it’s too early to judge the program, saying, “The early wave, that’s not what you judge.” Link
Opportunity Zones May Someday Help Poor Communities. They Already Are A Tax Shelter For High-Income Investors (Forbes)
Howard Gleckman is highly critical of the OZ program, and agrees with the New York Times piece, saying that the early results of the OZ program “should surprise no one.” He correctly points out that OZs “provide incentives to encourage people to do things they would have done anyway.” Many of the Opportunity Zone projects currently underway would have happened anyway. He warns that this low-hanging fruit is currently being picked by high-rollers, and riskier projects may eventually be financed by “the masses.” Link
Opportunity Zones have gotten a lot of criticism. Could they promote equitable green development? (Greater Greener Washington)
ThienVinh Nguyen writes that green infrastructure projects in Opportunity Zones could contribute to sustainable and more equitable development and help residents of low-income communities save on utility bills. But, “there is a practical difficulty in getting [OZ capital] to flow into clean energy projects, rather than real estate,” according to Jeffrey Schub, executive director of the Coalition for Green Capital. Link
Time is running out on opportunity zones — but there’s limited choice (Investment News)
In Investment News, Greg Iacurci writes about the lack of suitable investment options for investors, and time is running out to take full advantage of the tax incentive. Investors have until the end of this year to achieve a seven-year holding period prior to the end of 2026, required to take the maximum 15% reduction in capital gains tax liability. Link
How to Ensure Opportunity Zone Investments Strengthen Local Communities (Stanford Social Innovation Review)
Kate Gasparro and David Weinberger of Stanford Social Innovation Review highlight three ways that developers and investors can approach new Opportunity Zone projects, to ensure both the community’s welfare and the investment’s success: 1) learn from foundations that have identified community-minded OZ funds; 2) seek out strong (local) government involvement; and 3) identify grassroots movements to understand what a neighborhood needs. Link