Opportunity zones are loaded with tax benefits. But will they actually help residents?
Part of the Tax Cuts and Jobs Act of 2017 was a provision known as Opportunity Zones that was designed to significantly boost the fortunes of low-income communities. Like many previous government tax-incentive efforts to spark investment in distressed areas, the provision offers tax benefits to those who invest in these neighborhoods. Some experts say it will significantly boost their fortunes, but others aren’t as enthusiastic.
Governors in all 50 states and five U.S. territories have designated opportunity zones — more than 8,700 in total. The size of the program has the potential to dwarf earlier attempts to encourage investment in poor neighborhoods, such as the enterprise zone programs begun in the 1980s.
Unlike past programs, tax benefits are unlimited. But there are experts who worry that some of the investment may not benefit the intended targets.
“The opportunity-zone incentive is most attractive [to investors] where assets are appreciating most,” says Brett Theodos, a senior fellow at the Urban Institute. “Where is that happening? It’s in zones approaching gentrification. It could be that the lion’s share of investment goes to a minority of zones.”
To learn more about the potential issues and more concerns, check out the whole article below.