{"id":254076,"date":"2025-05-22T14:10:00","date_gmt":"2025-05-22T18:10:00","guid":{"rendered":"https:\/\/ncrc.org\/?p=254076"},"modified":"2025-05-22T14:10:00","modified_gmt":"2025-05-22T18:10:00","slug":"opportunity-zones-for-whom-lack-of-equitable-development-outcomes-highlights-need-for-reforms-to-key-program","status":"publish","type":"post","link":"https:\/\/ncrc.org\/opportunity-zones-for-whom-lack-of-equitable-development-outcomes-highlights-need-for-reforms-to-key-program\/","title":{"rendered":"“Opportunity Zones” for Whom? Lack of Equitable Development Outcomes Highlights Need for Reforms to Key Program"},"content":{"rendered":"

In most American communities, one will see sleek, newly constructed luxury apartments, a variety of trendy eateries, carefully manicured shrubbery and the new well-to-do residents seemingly without a care in the world on one block. Then, one will see the bleak, dilapidated buildings, gaudy fast-food restaurants, tree-barren landscapes and the established residents that are struggling to meet their daily basic needs often mere blocks away. This is the disturbing reality that has sadly become the norm across most cities, towns and municipalities in this country.<\/span><\/p>\n

The <\/span>Opportunity Zones (OZs)<\/span><\/a> that were created via <\/span>the Tax Cuts and Jobs Act of 2017<\/span><\/a> with the intention of <\/span>closing the economic gap<\/span> <\/a>between these communities are inadvertently accomplishing quite the opposite effect. Instead of capital flowing to the most economically disadvantaged neighborhoods, it has flowed to the most commercially viable of the OZs, further fueling the dynamic of gentrification. Instead of fostering economic opportunity for historically marginalized people, it is facilitating profit opportunities for developers, while economically distressed communities continue to suffer.<\/span><\/p>\n

The proposed \u201cskinny\u201d federal budget would effectively gut federal financing for CDFIs, HUD housing programs and community development block grants in the new budget \u2013 in essence all the programs that support community development in the United States. Opportunity Zones could possibly become the biggest federal effort to improve investment in low- and moderate-income neighborhoods. This makes getting the Opportunity Zone 2.0 provisions right crucial for both urban and rural areas that are economically struggling<\/span>.<\/span><\/p>\n

The overarching goal of OZs was to provide additional financial incentives for private developers to produce more community economic development projects and initiatives in low- to moderate-income census tracts. The governors of each state were tasked with deciding which census tracts could be classified as an OZ area, determined via <\/span>certain guidelines<\/span><\/a>.\u00a0<\/span><\/p>\n

\u201c<\/span>All low-to-moderate-income (LMI) census tracts were eligible for designation as an Opportunity Zone. Tracts are LMI if they have a median family income which is no more than 80% of the surrounding area\u2019s median income. If the census tract had a poverty rate over 20% it would also qualify as eligible for this designation,\u201d <\/span>wrote<\/span><\/a> Jason Richardson, senior director of research for NCRC, in a 2020 article.<\/span><\/p>\n

The program has attracted $100 billion in investments over the past 5 years, but the impact in terms of improved lives has been questionable. Additionally, problems with the OZ program became clear after only a few years into its creation, with disparities in investment and growing rates of gentrification affecting the original (and primarily majority-minority) inhabitants in the majority of OZ and OZ-adjacent census tracts.<\/span><\/p>\n