Economic Innovation Group
August 22, 2019
In the summer of 2018, the U.S. Department of the Treasury certified 8,766 individual census tracts across all 50 states, six territories, and the District of Columbia as Opportunity Zones. 294 Opportunity Zones contain Native American lands and nearly a quarter (23.2 percent) are in rural areas. These communities were chosen by governors from the wider universe of qualifying low income census tracts. Governors selected tracts that on the whole demonstrated far more distress across nearly every available social and economic measure than the eligible tracts they bypassed. The result is a map of both need and opportunity across which one of the most exciting economic and community development experiments in at least a generation will play out.
How do Opportunity Zones work? Investors can now choose to roll capital gains over into qualified Opportunity Funds, which in turn channel patient capital into qualifying equity investments in Opportunity Zones for at least a decade in exchange for capital gains tax reductions and possible exemptions. This new source of risk capital will seed new startups, accelerate business expansions, create jobs, increase and improve housing options, and revitalize the built environment in distressed communities across the country.
Here’s what we know about where these communities stand today.