With the passage of the House reconciliation bill, the majority party is working on sending one “big, beautiful bill” to the Oval Office. While Medicare debates dominated the budget conversation, President Trump’s “number one economic development project ever in our country,” Opportunity Zones, is uniting lawmakers across the aisle.
One of the administration’s key achievements was a first-of-its-kind tax incentive designed to uplift the nation’s most vulnerable communities. Known as the Opportunity Zones tax incentive, the federal program gave working-class Americans a chance to benefit from a growing economy — many of whom had been overlooked during the 2008 financial crisis.
Opportunity Zones leverage capital gains that otherwise would remain on the sidelines in investors’ portfolios, deploying those gains into low-income neighborhoods desperate for capital to come — and stay — in their communities. If investors keep their funds in these communities for 10 years, the gains are tax-free, a win-win for investors and residents of low-income neighborhoods.
The bipartisan initiative flooded low-income communities with private capital and helped breathe life into previously neglected neighborhoods. Now, Congress should prioritize expanding Opportunity Zones or making the tax incentive permanent, ensuring that funding continues to reach the nation’s underserved communities.
Since its 2017 inception, the program has been a success. The results speak for themselves.
Opportunity Zones have raised employment growth by 3 to 4.5 percentage points in OZ communities relative to similar non-OZ areas. Corporations and manufacturers made massive investments domestically that created good-paying jobs for millions of Americans.
According to a 2022 report from the Joint Committee on Taxation, Qualified Opportunity Zone Funds have raised more than $85 billion in equity — with another three years of investment beyond that. Over half of this money has gone toward new housing projects alone — a victory for families working hard to achieve the American dream of homeownership.
Previously overlooked communities like Erie, Pa. — once home to one of the poorest ZIP codes in America — benefitted from Opportunity Zones. Erie alone saw over $400 million in new, long-term capital investment, with similar success stories across all 50 states and territories.
The federal incentive doesn’t dictate where investments should go; instead, it empowers communities to develop the resources they need. While Opportunity Zones have significantly expanded housing stock, they have also spurred major investments in new businesses, industrial revitalization and manufacturing development.
Projects have ranged from research and development labs, and academic spaces to more localized initiatives like constructing a grocery store in a former food desert. Other examples include the launch of a 5G technology manufacturing center and the transformation of long-vacant buildings into job training hubs, employment centers and entrepreneurship incubators.
The incentive benefits rural communities, too. In Eastern North Carolina, Promised Land’s Opportunity Zone fund has invested in a 4,000-acre working farm that produces potatoes, corn and soybeans on a massive scale, adding a $4 million state of the art grain bin system. The farm improved its long-term productivity and, importantly, the community’s economic sustainability.
These projects are crucial as nearly 40 million Americans live in poverty and grapple with high living costs and limited access to economic opportunities. Opportunity Zones align their needs with investors searching for new opportunities as they navigate a volatile stock market.
Before the Opportunity Zones program was imagined, President Trump reshaped the skylines of our nation’s busiest hubs — changing their trajectory in the process. That same legacy lives on through this important initiative — only this time touching more communities than ever before. Federal lawmakers should make it a priority to extend or make permanent the Opportunity Zones program.
Shay Hawkins is deputy director for Opportunity Zones at America First Policy Institute. Jill Homan is advisor for Opportunity Zones at America First Policy Institute.
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