By Mary Childs
September 6, 2019
The Rockefeller Foundation is injecting another $3.7 million into programs to steer the Qualified Opportunity Zone program closer to its mission of boosting economically distressed areas.
The program -- which was developed in large part by the Economic Innovation Group, a think tank co-founded by Sean Parker of Napster fame, and became law in December 2017—allows investors to defer taxes on their capital gains by investing in property or business equity in a designated Qualified Opportunity Zone. If they hold on to the investment, they pay taxes on just 85% of the original capital gains at year seven, and any appreciation on that zone investment is tax-free after 10 years.
Investors have been interested but cautious given the program’s complexity and initial confusion over a few of the finer points. But the program’s primary criticism and biggest risk is that it will devolve into a real-estate gold rush, spurring a crop of luxury condominiums that not only fail to benefit current residents but displace them entirely.