Trump Directs Government Spending to Opportunity Zones

(Barron’s)

President Donald Trump  Photograph by Brendan Smialowski/AFP/Getty Images

President Donald Trump Photograph by Brendan Smialowski/AFP/Getty Images

President Donald Trump has launched a new interagency council to help funnel federal spending into the designated low-income zones created in last year’s tax bill.

Trump issued an executive order Wednesday creating the interagency White House Opportunity and Revitalization Council, to be spearheaded by Housing and Urban Development secretary Ben Carson. 

Nonprofit Accelerator For America Aims To Bring Cities And Opportunity Zone Investors Together

(BisNow)

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A few days after the Treasury Department unveiled its proposed guidance for the new Opportunity Zone program, the nonprofit Accelerator for America, led by Los Angeles Mayor Eric Garcetti, released an urgent reminder to cities and investors looking to capitalize on the program.

The Opportunity Zone program, which provides incentives for investors and developers to invest in select low-income areas nationwide, is intended to benefit underserved communities, not profiteers, Garcetti said.

Treasury releases guidance on 'opportunity zone' program created by Trump tax law

(The Hill)

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The Treasury Department on Friday released proposed rules about the “opportunity zone” program created by President Trump’s tax law, which is designed to help spur new investments in distressed communities.

The guidance is designed to provide investors with information needed to enter into business arrangements in the opportunity zones, Treasury said. Investors and state and local governments who plan to utilize the program had been looking forward to receiving guidance on the program.

Opportunity Zone Funds to Deliver a Tax Break

(Barron’s)

An abandoned home is seen with the Detroit skyline in the background.  GETTY IMAGES

An abandoned home is seen with the Detroit skyline in the background. GETTY IMAGES

Investors are anxiously awaiting guidance from the U.S. Treasury department on how they can invest in community development and get a break on capital gains taxes.

The potential investments that individuals, foundations, and corporations will be able to make are in “qualified opportunity zones”—8,700 economically distressed areas identified by each state and approved by the Treasury department. Generally, the designated communities have an average poverty rate of nearly 32% and an unemployment rate of 13%, according to the Urban Institute, a U.S. think tank.

The tax act that was signed into law late last year included provisions for funneling capital gains into these opportunity zones, allowing investors to defer paying taxes on those gains, and eventually, to pay fewer taxes on investments made for five years or more. In an interview with The Hill earlier this week, U.S. Treasury Secretary Steve Mnuchin predicted the new zones will attract $100 billion in capital.

California Opportunity Zone Partnership Launches

(Accelerator for America)

 
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FOR IMMEDIATE RELEASE Contact: Yusef Robb, Accelerator/Garcetti, 323-384-1789

CALIFORNIA OPPORTUNITY ZONE PARTNERSHIP LAUNCHES: Organized by Nonprofit Accelerator for America, Partners Include State of California, Energy Foundation, Cities of Oakland, San Francisco, San Jose and Los Angeles

SAN FRANCISCO -- Los Angeles Mayor Eric Garcetti, Advisory Council Chair of the nonprofit Accelerator for America, was joined by California Treasurer John Chiang, San Francisco Board of Supervisors President Malia Cohen, Oakland Mayor Libby Schaaf, and San Jose Mayor Sam Liccardo today to launch the California Opportunity Zone Partnership.

Fixing America’s Forgotten Places

(The Atlantic)

Detroit, MichiganERIC THAYER / REUTERS

Detroit, MichiganERIC THAYER / REUTERS

FRESNO, Calif.—Census tract 06019000100 has a lot going for it. Locals cheer the melting-pot atmosphere, the arts scene, the nearby nature, and the affordable housing—affordable in national terms, which feels all the more amazing given that it is a quick drive both to the grandeur of Yosemite and to the tech hub of the Bay Area. Start your car up and grab a coffee here at 9 a.m., and you could be standing in downtown San Francisco or in front of Apple’s headquarters by noon.

How States Can Maximize Opportunity Zones

The New Localism

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By Bruce Katz & Jeremy Nowak

June 26, 2018

Yesterday we released a policy brief entitled “How States Can Maximize Opportunity Zones”. The paper was written in concert with our good friends, Jamie Rubin and Dan Berkovits, under the aegis of The Governance Project, a new non-profit that aims to help state and local leaders leverage the private sector and private capital to deliver new solutions to critical challenges.

Our policy brief lays out a plan of action for states to realize the full economic and social potential of this unique tax incentive. To recount, the Tax Cuts and Jobs Act of 2017 provides a new incentive – centered around the deferral of capital gains taxes — to spur private investments in low-income areas designated as Opportunity Zones. Given the significant interest among investors, it is possible that this new tax incentive could attract tens of billions of dollars in private capital, making this one of the largest economic development initiatives in U.S. history.

Read More

How States can Maximize Opportunity Zones

(The Governance Project)

 
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The Tax Cuts and Jobs Act of 2017 provides a new incentive— centered around the deferral of capital gains taxes—to spur private investments in low-income areas designated as Opportunity Zones. Given the significant interest among investors, it is possible that this new tax incentive could attract tens of billions of dollars in private capital, making this one of the largest economic development initiatives in U.S. history.

This policy brief lays out a plan of action for states to realize the full economic and social potential of this unique tax incentive. Governors have already played a critical role by selecting Opportunity Zones in their states from an eligible group of low income census tracts in accordance with the law. But state involvement should not begin and end with designation. States can play multiple roles to enhance the attractiveness of Opportunity Zones for market capital and ensure that social benefits within and beyond these communities are maximized.

Will new Opportunity Zones attract investors to the Bay Area's poorest areas?

(SF Business Times)

Shawn Gavne, site manager at Alstom  TODD JOHNSON | SAN FRANCISCO BUSINESS TIMES

Shawn Gavne, site manager at Alstom

TODD JOHNSON | SAN FRANCISCO BUSINESS TIMES

On a 157-acre swathe of waterfront land on Mare Island, the City of Vallejo wants to see 1 million square feet of new commercial space built. As it looks to pick a developer later this year, the city hopes to have an additional way to lure investment: A new tax break that’s spanning all of America.

Six Vallejo census tracts including Mare Island, along with dozens of other high-poverty and low-income tracts around the Bay Area, were certified as Opportunity Zones by the U.S. Treasury Department.

How Opportunity Zones could become a big catalyst for inner-city development

(Curbed)

Shutterstock

Shutterstock

A little-noticed provision of last year’s tax reform push is starting to take shape, and according to an Urban Institute researcher, has the potential to become the nation’s largest economic development program.

Opportunity Zones weren’t initially part of President Trump’s tax reform agenda, and were slipped into the Tax Cuts and Job Act by members of congress, according to Brett Theodos, a researcher at the Urban Institute.

But supporters believe that ultimately, this vehicle for investment can become a vital tool for communities that haven’t benefited from the recent recovery.

Investing in Poverty Reduction

(Project Syndicate)

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After almost a year of accomplishing nothing, the Republican-led US Congress has managed to enact a far-reaching tax law and budget legislation that will shape the contours of future government spending. Neither will solve America's most pressing economic challenges, but each does include at least one sensible idea for tackling poverty.

BERKELEY – The tax legislation that US President Donald Trump signed into law last December will dramatically increase inequality and the federal budget deficit. Yet, hidden within it – and within budget legislation enacted in February – are two promising programs for helping state and local governments address the needs of disadvantaged Americans.

Tucked Into the Tax Bill, a Plan to Help Distressed America

(NY Times)

Michael Tubbs, the mayor of Stockton, Calif., hopes a provision in the new federal tax law will help entice investment to the city.CreditCreditAndrew Burton for The New York Times

Michael Tubbs, the mayor of Stockton, Calif., hopes a provision in the new federal tax law will help entice investment to the city.CreditCreditAndrew Burton for The New York Times

WASHINGTON — A little-noticed section in the $1.5 trillion tax cut that President Trump signed into law late last month is drawing attention from venture capitalists, state government officials and mayors across America.

The provision, on Page 130 of the tax overhaul, is an attempt to grapple with a yawning hole in the recovery from the Great Recession: the fact that, in huge swaths of the country, the economic recovery has yet to arrive.

The law creates “Opportunity Zones,” which will use tax incentives to draw long-term investment to parts of America that continue to struggle with high poverty and sluggish job and business growth. The provision is the first new substantial federal attempt to aid those communities in more than a decade. And it comes as a disproportionate share of economic growth has been concentrated in so-called superstar metropolitan areas like Los Angeles and New York.

If the zones succeed, they could help revitalize neighborhoods and towns that are starved for investment.