Opportunity Zones Skip Over Hard-Hit Rural Places

Shelterforce is right on the money in their article, “Pushing Opportunity Zones to Fulfill Their Promise.” The piece urges urban leaders across the country to set guiding principles to make sure this new tax incentive, called the “most significant community development program to pass in a generation,” leads to equitable development and not displacement of low-income residents and people of color.

Opportunity Zones were created by the federal tax overhaul in 2017 to entice private investors to underserved areas by eliminating capital gains taxes owed on prior investments if reinvested in Opportunity Zone communities for at least a decade. The new program has already attracted $28 billion in investment capacity.

But if you didn’t know better, you could conclude from Shelterforce’s article, upcoming conference agendas, and burgeoning industry blogs that Opportunity Zones were meant only for urban areas. In fact, about 40 percent of the designated 8,700 Opportunity Zones spread across the nation are rural. To date, however, investors have focused almost entirely on commercial real estate development in large urban areas. Of the 34 Opportunity Funds reviewed by the National Council of State Housing Agencies(NCSHA) in late 2018, only two even mentioned rural areas. And few of the 150 applications received in response to a national foundation request last fall for “mission-aligned” fund managers were directed to rural places. None mentioned the Deep South or Appalachia.