How OZ Policy May Evolve Under Biden, with Steve Glickman

Steve Glickman

With Joe Biden in the White House, how might Opportunity Zone policy evolve over the coming years? Steve Glickman recently joined me during a fireside chat at OZ Pitch Day to discuss this topic and more.

Steve is founder and CEO of Develop Advisors, a consulting firm for Qualified Opportunity Funds. He previously co-founded the Economic Innovation Group.

Click the play button below to listen to the audio recording of my fireside chat with Steve.

Or, for the video recording, click here.

Episode Highlights

  • The history of Opportunity Zone inception, the role that EIG played, and how the impetus for program creation is still, unfortunately, very relevant.
  • The purpose of Opportunity Zones: what it is and isn’t.
  • The unique bipartisan appeal of the Opportunity Zones policy initiative.
  • The biggest challenges over the first few years of the program, progress that’s been made so far, and the role of the regulatory process.
  • The size, diversity, and evolution of the Opportunity Zone marketplace.
  • How Opportunity Zones may evolve under the Biden administration.
  • Why it may be useful to view the Opportunity Zones tax incentive as more similar to the charitable contribution deduction, than it is to traditional community development programs.
  • How Opportunity Zones can reach their fullest potential.
  • How federal grants, federal tax credits, and local incentives can be stacked on top of Opportunity Zone incentives.
  • The future of Opportunity Zones beyond 2026.
  • How Opportunity Zones can impact rural and tribal areas, and the challenges of attracting capital in those areas.

Featured on This Episode

Video Recording

Industry Spotlight: OZ Pitch Day

OZ Pitch Day

OZ Pitch Day 2021 was a one-day online event geared toward matching investors who have capital gains with Qualified Opportunity Funds that are seeking capital. The live event took place on March 9, 2021 and featured pitches from 12 Qualified Opportunity Funds, three educational segments, and an interactive happy hour mixer. More OZ Pitch Day events will be coming later this year.

Learn more about OZ Pitch Day:

About the Opportunity Zones Podcast

Hosted by OpportunityDb.com founder Jimmy Atkinson, the Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in opportunity zones.

Show Transcript

Jimmy: Welcome to the Opportunity Zones Podcast. I’m your host, Jimmy Atkinson. President Joe Biden this week has started to unveil details for his $3 trillion infrastructure plan. How Opportunity Zones may play into this plan are still to be announced. But also this week are several news articles signaling potential upcoming changes to the tax code. Of specific interest to listeners of this podcast is how the Biden administration may propose taxing long-term capital gains at the same rate as wages for high earners. This could effectively increase the federal tax rate on capital gains from the current 23.8% to 39.6% for those in the highest tax bracket.

For taxpayers who re-invest capital gains in Qualified Opportunity Funds, this could make the deferral benefit much less interesting, but the exclusion benefit would suddenly become much, much more valuable. On the whole, I believe an increase in the capital gains tax rate actually makes Opportunity Zones more enticing overall.

Today’s podcast episode is the audio portion of my keynote fireside chat with Steve Glickman, who joined me on March 9th for OZ Pitch Day 2021. Steve and I discuss several aspects of how Opportunity Zones have evolved since inception, but much of our conversation revolves around how the Biden administration may change the program in upcoming years. To watch this fireside chat in video format and learn more about the event, check out the show notes for today’s episode at OpportunityDb.com/podcast. Enjoy!

Jimmy: So, Steve is going to be joining me for our fireside chat today. Steve is the co-founder and former CEO of the Economic Innovation Group. And currently, he is founder and CEO of Develop Advisors, a consulting firm for qualified opportunity funds. He is also the author of “The Guide to Making Opportunity Zones Work.” Some of the topics that we’ll be covering during our chat will be the history and background on Opportunity Zone inception and EIG’s role, the role that EIG played in that. I think that’ll be reviewed for a lot of you here, but some of you may be new to Opportunity Zones and this’ll give you a good backdrop on where the policy came from. We’ll also discuss progress over the first few years of the program. We’ll do a marketplace update.

How the program may evolve under the new Biden administration. That’s been a big topic of discussion and I keep getting questions and questions and questions on what Biden may do with the program. So, we’ll address that. We’ll also discuss how Opportunity Zones can reach their fullest potential. And then if there’s time at the end, we’ve got a half an hour today, Steve, we’ll leave some time for some Q&A. So, Steve, to start us off, why don’t you tell us a little bit about how the Opportunity Zone initiative came to be and you played a key role in that and your organization, Economic Innovation Group, played a key role in that. Can you go into a little bit of the history and the background on Opportunity Zone inception for us?

Steve: For sure. First, Jimmy, thanks for pulling this together and including me. You’ve really been, I think, instrumental in building the community around Opportunity Zones and Opportunity Zone funds. And I think that’s the fun and exciting thing about this program. It’s not really a traditional government program where the relationship is pretty one-sided between community developers or investors or funds and the government, this is much more something that’s happening on the ground up. And there’s a lot of different ways people are engaging with this program in terms of all the different types of stakeholders that, hopefully, we’ll talk about. And I think that’s what makes it fun and interesting and creative and entrepreneurial. And you know, now, you’ve got lots and lots and lots of funds that are contributing to it. So, kudos to you for playing a big part in that.

You know the history for this program, unfortunately, is still very relevant. The backdrop for Opportunity Zones was the recession in 2008-2009. And, you know, without getting into a ton of economic data, which I love to nerd out on, you know, the basic features of it was that during the recovery, importantly, growth happened in a very uneven way around this country. And that has real consequences for people beyond just economic consequences, it affects all sorts of aspects of people’s lives. We saw, you know, smaller towns, rural areas, former industrial centers really not grow at the rate we saw tech centers and coastal cities grow. You know, I don’t have to tell you based on what we’ve seen over the last four years that that also has massive impacts on our politics, it has massive impacts on health outcomes, on life outcomes. It’s something that I was then and am now as concerned about as any other major issue in the country. It’s as big of an issue or challenge as climate change is.

And the reality is the government has a limited set of tools to deal with it. I mean, they could do more, you could see major infrastructure, massive, you know, Great Depression-era spending packages and government employment programs, but the political capital, the political realities of today are a lot different. And so, the idea behind Opportunity Zones was to create a marketplace for rebuilding and investing in places that the market organically wasn’t investing in and that the public sector was never going to really fill the gap on and create a large enough incentive to drive that marketplace. And actually the backdrop of this program, this is not really a housing program, it’s not an employment program, it’s not a business program, but those are all outcomes we hope to see, it’s really to create a marketplace to stand in the place of what government used to be able to do at scale.

The good news about that approach is that it early on, and to this day, has a lot of bipartisan attractiveness to it. It’s not an overwhelming government program, but it is something that’s designed with guard rails to help communities that have fallen behind. And we were able to track a big coalition of 100 members of Congress, you know, when the Economic Innovation Group was first doing this to get behind it. It was, you know, most famously led and helmed, for good reason, by Tim Scott and Cory Booker. You know, Tim Scott being very close to President Trump when he became president at the time and, you know, still a conservative Republican from South Carolina. Cory Booker, a progressive Democrat from New Jersey who ended up running for president against Donald Trump. And we built you know, a group of economists behind it that was very diverse. It included, you know, Jared Bernstein, who was the leader among the progressive economists in that group who is now on President Biden’s Council of Economic Advisors at the White House. And it was co-chaired with Kevin Hassett, who became Donald Trump’s chief economic advisor. And I just want to stop there for a second.

There is nothing else that does that, right? There is nothing else that brings together those sort of players, even really basic common sense stuff, like to me, investing in infrastructure, you know, or renewable energy or stimulus or whatever. This has brought the parties together in an unprecedented way. And despite whatever controversy may be associated with Opportunity Zones, you know, little or big, it has continued to maintain that set of bipartisan appeal, not just in Congress, where it has continued support, and not just in this administration, which I’m sure we’ll talk about, but also with governors and mayors around the country who are using this as an organizing principle to plan for the next decade of their economic growth. And that was really what this program was set up to do, you know, we don’t need to get into the technical stuff, but it’s a way to take capital gains off the sidelines, put it into, you know, development projects around the country and put that in the hands of local leaders and local developers and local investors. And that was the theory of the case and the, kind of, political background of it. And I think the market has shown that it can deliver that.

Jimmy: Yeah, that’s great. It is a program unlike any other. You’re absolutely right. And we won’t get into the weeds technically on how the program operates or what the tax incentives are during this fireside chat. We might cover that a little bit more in the panel that’s following you, Steve, How to Invest in Opportunity Zones. So, Steve, tell me about the progress that’s been made over the first few years of the program. The Opportunity Zones legislation, I think it was crafted or initially started being developed while Obama was still in the White House. And then it was passed as part of the Tax Cuts and Jobs Act at the end of 2017. So, we’ve had about three full years now since the legislation was passed, less than three years since the zones were created. Tell us a little bit about the progress we’ve made in that time.

Steve: Yeah. Well, it’s been a roller coaster and, you know, you’re right on how you map this out. There’s a misnomer really that this has much to do with either administration or any administration. Obama, Trump, or Biden, they have their roles to play to, you know, both create the regulatory framework and you know, create other incentives around the program, but they’re not really the drivers of the program and never have been. The idea was conceived of in 2013, 2014, 2015, obviously, during the Obama administration, but separate from it. And it was really led by Congress and most of the major reforms and changes you’ll see are going to be driven by Congress.

With that being said, at the beginning of the program, between the end of 2017 when it was passed and the end of 2019, for better for worse, the Treasury Department and IRS had a very important role to play in taking this very short, simple construct and creating hundreds and hundreds of pages of rules around it. And that has created, I think now by this point, a lot of certainty in the market around how the broad brushstrokes of the program work, but it also makes the program complicated because, as I’m sure you’ll get to, there’s lots of rules you have to be aware of to ensure that, you know, long-term capital is really going to communities and projects that, you know, are going to make a difference in the places where investment is going.

So, our first biggest challenge was creating that framework and creating it in a way that would be market-friendly enough to grow this into something significant. And I think from all accounts, it did that. I mean, it was a balance, not everyone’s going to love it from either the investor you know, side or from the folks that are more focused on the community development aspect of it. But I think actually the Trump administration struck a pretty good balance and most of it was done through the bureaucrats of the IRS. The next, I think, big challenge for us was to take a look at, can we grow this market into something meaningful and large? And I think the evidence there is clear. You know, we don’t know exactly how big the market is, and there’s this question around data and reporting, which is an important thing that everyone I think wants to see built into this program for lots of different reasons, but there’s tens of billions of dollars, I think without dispute, that’s been deployed. I’d say probably about $50 billion in the first couple of years.

To give you a frame of reference, the biggest community development program we had in the country before this one is 20 years old. It’s a terrific program, but it’s the last time, you know, a new idea has really been achieved at scale in this space. It’s called the New Markets Tax Credit. It’s another bipartisan program that dates back to the end of the Clinton administration. And you know, at its peak, was moving about $3.5 billion a year of equity. This program probably moves somewhere between 5, 6, 7, 10 times that much of equity in a year.

Jimmy: Yeah. New Markets is capped at $3.5 billion in most years, and this is virtually unlimited.

Steve: For sure, I mean, anytime you have a tax credit program where the government’s putting up the money upfront, it’s going to be capped. You know, those credits are generally bought by large banks and then invested into a very specific set of projects around the country. And even if it was grown dramatically, it’s still wouldn’t scratch the itch that OZs are trying to scratch. So, OZs are much bigger because the investors are taking the risks and they get the benefit at the tail end, for the most part, after 10 years of investments and investing successfully into this program.

I think the second big thing to…you know, or maybe the third big thing we want to identify is where is the money going? And, you know, again, we just need better data on this, but if you look at what CVRE or Real Capital Analytics has looked at in this space, particularly around real estate, which is where most of the capital is being invested right now, you see that the biggest growth markets around the Opportunity Zones are actually markets people are not…you know, many people would be surprised to hear about, they’re places like Baltimore and Detroit and Birmingham, Alabama, and Philadelphia, and a lot of the places that got some of the early, you know, in many ways, negative attention like Miami or Portland or Seattle actually lost ground in their Opportunity Zones or saw very minimal gains. I think that’s because this program works really well in places you can buy cheap assets or assets and land cheaper and hold for a long period of time, and that’s really not markets like, you know, Miami and Seattle and Portland and New York City.

So, we’re seeing growth in places we wanted to see growth. I think if you look at what the next phase of what people are looking towards, they’re looking for more diversification. Most of the investment is happening in multifamily real estate. I think people want to see more and more investment, and that I don’t think it’s going to change with the recession because of all the pressures on office and retail and hospitality sectors, but people want to see a lot more investment in businesses, operating businesses of all time, manufacturing, infrastructure, energy, high-tech businesses. And there’s good examples of all of that, and I’m sure some of your funds that you have with you today will talk to that.

And, you know, and I think the other big success piece is the diversity of stakeholders involved. There’s a thousand funds around the country, many, many of these, and I’m sure many if not all of the ones that are going to, you know, talk to your audience today are going to be new creations from fund managers that have a track record in an adjacent space. So, it’s creating a lot of ground-up entrepreneurship. A lot of fund managers that are diverse, that are people of color, great examples around the country, many who are focused on tough areas, you know, like in Atlanta, like South Central Los Angeles, where you have large, very successful funds that have taken root and many other places, Baltimore, Birmingham, Detroit.

And you know, and the other type of engagement is at the community level. Mayors are very, very involved in this. The Conference of Mayors make this one of the biggest issues they talk about at their annual gathering every year. Many, many mayors develop plans, 10-year plans around Opportunity Zones. So, this is creating, even among its critics, a whole new ecosystem of people that care about the long-term future of places that people really just weren’t focused on before. So, I think it’s very successful. You know, whether or not after 10 years we’re going to see the type of job growth and business growth that we all hope to see, I think we’ll have to wait and see what happens in many places and get some more data. But I think the early signs are promising.

Jimmy: Yeah. It’s a little bit early to render a verdict on Opportunity Zones at large, but I agree with you. It’s been a promising trend so far, just the amount of capital that’s been raised, the zones they’re flowing into, the diversity of the types of investments. We’re seeing a lot more operating businesses come in to the program now. Tremendous, tremendous progress I think that we’ve made. I agree with you. So, I want to talk about Biden now because that’s been a big topic of conversation and a big concern among investors and fund issuers alike. For better or worse, this has been labeled as a Trump program in the mainstream media for the last several years, and there was concern when Joe Biden and Kamala Harris came to office that they would do away with the Opportunity Zones program. I want to put those rumors to bed, it doesn’t look like there’s any sign of that happening. In fact, President Biden has signaled his support for Opportunity Zone. Steve, what are your thoughts on how you think the program may evolve under the new Biden administration?

Steve: I think people have to, with almost any issue, separate the Washington, D.C. political conversation around the partisan camps, around any issue, and what may be really happening around the country. In fact, right after Biden won, at least for most people, they would say won the election, “The New York Times,” Bloomberg, and “The Wall Street Journal,” who had all written critical stories about the program, basically, for the years of the Trump administration, all wrote positive stories about it. And I talked to one of the reporters and they asked me a very similar question. And I said, you know, I think all evidence…and I’ll share some of this with you just so, you know, you don’t have to take my word for it. All evidence is the Biden administration would be very supportive of it at the time. This was in November. And they asked me why, and I said, “Because I think they think it’s a good idea.” And that was kind of shocking to them, but they’ve always thought it’s a good idea.

Democrats, for the most part…and there are some Democrats who are critics of it, more on the progressive edge of the party. And there are Republicans who are critical of it, mostly on the conservative edge of the party, both Cato and Cap have written critical things about the program. But if you look at what the connection is between this administration and the program, it’s really strong. The Biden Institute while, you know, after Joe Biden was the vice president did a big event around this. His chief of staff, Ron Klain, was an executive at Revolution, which has an OZ fund, Steve Case’s fund, who are big proponents of this. Obviously, Jared Bernstein, who’s now, you know, on his Council of Economic Advisors.

You know, Vice President Harris has offered legislation to augment Opportunity Zones around disaster areas when she was a senator. And when she became the vice presidential candidate, the first event she did or one of the first events she did was with African-American voters in Wisconsin talking about how the administration was going to double down on OZs. And there’s some early proof of that. I mean, Pete Buttigieg, another supporter of Opportunity Zones, now the secretary of transportation, announced the round of infrastructure and transportation grants from the department under the Biden administration and made one of the two bigger priority areas…one was climate change, the other was Opportunity Zones in terms of the types of projects that they were going to give priority to under these programs. And I think you’re going to see more of that. Again, I expect to see some kind of regulatory tweaking at the margins. There’s a big question of what we do around the census. There’s questions around whether we lengthen the program and how we get data about it.

But most of what I think you’re going to see is ways to enhance the program around aligning it to priorities. During the campaign, it was highly focused on racial equity issues. It’s going to be, I think, tied to increasingly infrastructure, clean energy, small business and entrepreneurship, and large community development programs as it should be. And, you know, I think people should be much more concerned and focused on bigger changes you’re going to see in the tax code, which is what happens to capital gains or like-kind exchanges or the estate tax, all of which I think will serve to benefit the value of the Opportunity Zone incentive because it will become an alternative strategy for all of those buckets. They’re way more at risk, I think, under a Democratic Congress than opportunities are, which in many ways mostly off the radar screen for policymakers now that it’s not associated with former President Trump.

Jimmy: Yeah. And another thing to point out is that, as you mentioned earlier, many mayors around the country love this program and the vast majority of mayors of large cities are Democrats. And so, I think they have lended their support to the program as well. We do have a few questions that are coming in. We’ve got 10 more minutes with Steve this morning. So, keep the questions coming. We’re going to get to Q&A in a couple of minutes. Please use the Q&A tool in your toolbar if you have questions for Steve. And we do have a few questions from people saying, “Hey, I’m a beginner. How does the program work?” And we’re going to cover that in the next panel, How to Invest in Opportunity Zones. That’ll get started in about 10 more minutes here. Steve, before we get to Q&A, I want your thoughts on how do you think that the Opportunity Zones initiative can reach its fullest potential? What needs to happen?

Steve: So, Opportunity Zones as a construct are I think more similar to like the charitable contribution deduction than they are similar to traditional community development programs. There’s a lot of agency given to individual investors and individual fund managers and individual developers and entrepreneurs to make what they want of this program. And you know, just like I may not equally value every single form of philanthropic or charitable contribution that gets a tax benefit, I’m sure not everyone’s going to like every Opportunity Zone program. But to the extent we want to see more impact, more business investing, more corporate investing, more investing in tougher places, more investing that engages local equity, we have the tools to do that right now. It doesn’t require any kind of regulatory change to get there. And so, I hope as the market shifts to creating more, you know, market-rate development in Opportunity Zone communities, what follows is the philanthropic commitment, the anchor investor commitments from universities, from pension funds, from large corporates, from hospital centers, and from governments that will double down on that.

If those things are aligned, and I think there’s as much responsibility for this on the public sector and in the corporate investment sector as there is directly in the Opportunity Zone community, we’re going to see tremendous changes in the trajectory of communities that were written off not too long ago. And COVID provides a unique opportunity for that. People now are moving back, they’re working virtually, they’re going to lower-cost markets. There’s a desire, particularly from younger workers to want to be closer to home and to want to be in markets that are not as expensive as those coastal markets. I think there’s unique opportunities for us to harness that and align it with where Opportunity Zone investing is happening. So, I’m very, very optimistic about it. And frankly, I don’t see us having another choice. We can’t absorb everyone in San Francisco, New York, and L.A. Those cities have become unaffordable and it creates a whole nother set of policy problems that we haven’t been able to deal with as well.

Jimmy: Good. Well, Steve, thank you so much for all your insights today. We do a few questions from the audience that I’d like to turn to now for the last few minutes. Eagles, my friend, Eagles asked the question, which is he points out that there are over 160 federal programs with relevance to helping and supporting Opportunity Zones. What are good examples of how these programs are leveraged and integrated with qualified OZ investments?

Steve: Yeah. So, I think it obviously depends on the project, but, you know, I’ve been involved with the launch of a technology company that leveraged the priority they got in terms of the Small Business Innovation Research Program, which is a federal grant program for companies that have high-tech research that places a priority on Opportunity Zones and HUBZones. We obviously are seeing it with the infrastructure granting program. You can overlay this to New Markets Tax Credit or Historic Tax Credit. A little bit harder on the low-income housing side, but that’s also possible. Many, many cities are providing land use, you know, accelerated zoning, permitting, entitlement processes.

You know, something like 36 out of 40 states that have income tax state income tax have conformed their capital gains. This is a really important point. Many of these states are run by Democratic governors who are very progressive and have been very critical of the Trump administration and its tax program, and they put their own skin in the game. One of the first states was New York, which has one of the highest capital gains rate. And that governor is no, you know, wallflower when it comes to critiquing Trump tax policies. So, there’s lots of ways that, you know, state and local incentives can be leveraged as well as on the federal level. I actually think there’s probably more room to run on the state and local side that tends to be much closer to the types of things that align with Opportunity Zones, which is getting the regulatory approvals, the, you know, cheap land that can help accelerate, you know, the sort of developments that cities and states are looking for. And I expect to see a lot more of that from creative city leaders around the country.

Jimmy: Yeah, Now, if we can just get California to conform, then we’ll really be in business, right? They’re one of the few who don’t.

Steve: Don’t hold your breath. I mean, there’s good news, Gavin Newsom, the governor has been very supportive of it and so has the State Senate there, which is run by Democrats, but it’s been very tough in the House. It’s a progressive, you know, House and, you know, they’re frankly one of the outliers in the country. We’re working on getting them…it’s hurting California, unfortunately. It just makes it a tougher place to invest in.

Jimmy: Yeah. I think there’s only three or four states that aren’t conforming yet. And they’re the biggest ones. They’re the elephant in the room. Steve, Kevin asks, “What is the future of Opportunity Zones beyond 2026?” Is there any chance that could get extended or odds of reinstituting the 7-year/15% basis step-up? What are you hearing?

Steve: Good question. I mean, let me point out that the program does extend beyond 2026. 2026 is the date that everyone’s got to pay back their tax or their deferred capital gains tax, but the Opportunity Zones itself, the physical zone to last through the end of 2028, you can hold your investment in a project or an asset through 2046. So, there’s a long lens. The idea here is that every 10 years, and maybe we should align this with the census going forward, maybe not, there’ll be a new selection of tracks to account for the new economic realities of, you know, the changing landscape around the country. I’m very optimistic the program will be extended when the time comes. Proof will be in the pudding as we have more data and see the impact we’re having around the country.

In the meantime, there is some conversation around extending the program by a couple of years. I think Republicans in Congress, in particular, you know, would like to see that happen. I can see that happening with a broader package of reforms at the margins to the program, which include data and reporting, may include a prohibition on some additional types of investments, like self-storage, for example, facilities, which are not very in vogue in Congress. It may include removing some of those zones that are highest on the relative economic lens that, you know, probably don’t meet the true mission of the program. Again, we’re talking about, you know, probably less than 100 tracks out of the 8,764 around the country. So, I could see a big agreement on lengthening the program, but whatever happens is likely to happen at the margins. And I think, you know, we won’t know, you know, whether this becomes a permanent part of the tax code or is extended until much later on in the program where Congress really has better data to evaluate.

Jimmy: Right. So, hopefully, good data start coming in, and then that’ll give them some political capital to extend the program. That’s all we can hope for right now. A couple more questions before I cut you loose, Steve. Orlando asks, “How can Opportunity Zones reach its full potential in rural and tribal OZ land with limited economic development?” Any thoughts there?

Steve: Yeah, listen, I think that, first of all, about a third of the tracks around the country roughly, depending on how you cut the data, are rural and you are seeing projects happening in rural areas that tend to be projects that do disproportionately well. Manufacturing, for example, there’s a huge solar project in a very rural area outside of Fresno. In fact, the largest solar project in the country is an OZ project, you know, in that part of California. You see it happening in rural Colorado, around mountain towns, but, you know, Opportunity Zones track the overall marketplace. There’s just less investment going into rural areas than there are urban areas. It’s harder to have the type of concentration to attract, for instance, multifamily real estate or that sort of talent you need for high-tech companies, but there’s all sorts of other asset classes that do make sense.

And I think, obviously, the private investment market has a lot of control over the flows of capital, but I think government has a big role to play here. Increasingly, we need better and bigger incentives to create the, sort of, job-creating business starts that can do well in rural areas. And, you know, I think you’re seeing some elements of that in the Opportunity Zone program, but it’s not a panacea, we’re going to need other things happening simultaneously to really see a lot more growth there.

Jimmy: Yeah, agreed. The old adage I keep hearing is it’s just one more tool in the toolbelt. So, you’re right.

Steve: Yeah. I think it’s a big tool, and I think this is another place, and I think I would argue, not to get off-topic, climate change is an example like this where private-sector leadership can drive public sector action. The public sector has just been too slow and too small ball at dealing with this issue around inequality. I would argue the same thing around climate change, and the private sector has a lot of agency here to show them directionally where we need better and bigger support by the government. They want that help and need it. And I think to the extent we want to see more growth in rural areas that local governments and state governments and local investors who have skin in the game have to lead there, they have to be the first movers and you’ll see other investment follow. I do think we have examples of that right now.

Jimmy: Excellent. Well, let’s get one more question then I’ll cut you loose. And if you’re here for my panel on How to Invest in Opportunity Zones, if you’re one of my panelists, I do see you here and we’ll get you on in just a moment. But wanting to get to this last question from Jeffrey, he asks, “How do those working in community development interface with those interested in learning about our projects and missions who have a desire to support?”

Steve: Yeah. So, the community development stakeholders around the country are very, very engaged in Opportunity Zones. I mean, everything from major philanthropies like Rockefeller and Kresge to CDFIs around the country who are oftentimes investing in tax credits that work in a complementary way to Opportunity Zones. Keep in mind the Opportunity Zone map really overlays, for instance, the New Market Tax Credit map, which is built around the same low-income community census tracks. And they’re a great source of debt, of deal flow, of, you know, community knowledge about what works and doesn’t work, you know, around the country.

I think one of the misnomers about Opportunity Zones is that they somehow go around existing guard rails of how we govern, how we treat development in cities around the country. And that’s just not true. They follow the same rules of the road that every other development project, you know, whether it’s subsidized or not by the government has to go through, and that’s a tremendously political process that has a lot of community engagement. I think really good Opportunity Zone funds take that seriously very early, and community development partners, both foundations and local foundations, as well as CFDIs are really, really important players to partner with to ensure that your program has both short-term and long-term success.

So, I’ve seen that all around the country. I’m very engaged in how that works in places like Chicago and Baltimore and D.C., where I’ve been actively engaged, and Atlanta. And in those markets, for example, and many others, the community development stakeholders are very, very involved in many, many of the deals and there’s a win-win there. So, you know, I expect we’ll see more and more of that. There’s no reason to fear this program. It’s just really a source of cheaper long-term equity, and it can be used in lots of different ways.

Jimmy: Awesome. Well, Steve, thank you very much for joining us today. Thank you for your leadership in the Opportunity Zones industry. I really appreciate your time today.

Steve: Thanks. Thanks for having me, Jimmy.

Jimmy: All right. Take care.

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