July 2, 2019
Opportunity Funds are launching, intrigued investors are beginning to liquidate capital gains, lawyers are getting involved, and communities are proactively working to court investors. Interest in Opportunity Zones — a federal tax incentive designed to stimulate economic investment in economically distressed communities across America — has never been greater. Much of this interest and excitement stems from the sheer potential of the Opportunity Zone initiative to breathe new life into struggling communities; as much $6 trillion in unrealized capital gains will be eligible for investment in 8,762 census tracts across all 50 states. For communities with little investment capital, Opportunity Zones could become the most impactful economic intervention since the New Deal.
We want to make the most of Opportunity Zones. That’s why the Sorenson Impact Center collaborated with Forbes to create The Forbes OZ 20: Top OZ Catalysts. In support of this effort, we analyzed indicators from 7,500 Opportunity Zones, including education, housing costs, and life expectancy. Although our current findings are only preliminary, they’re revealing: when compared to non-designated census tracts within the same state, Opportunity Zones tend to have worse economic, educational and health-related outcomes, despite some variation across states. Our observations, further detailed below, serve to highlight the challenges that distressed communities face in stimulating economic development, as well as the importance of this initiative’s success.