Opportunity Zones aren’t for everyone.
For starters, the new federal tax break is only available to 7.3 percent of taxpayers. In 2016, that percentage represented 11 million individual and corporate tax returns with positive capital gains income totaling $634 billion. Those billions would be eligible for a tax break under the Opportunity Zone provision of the Tax Cuts and Jobs Act of 2017.
If you’re one of the estimated 35 million United States residents of designated Opportunity Zone census tracts — 60 percent are people of color — the projects and businesses financed through the new Opportunity Zone tax break may create jobs or new amenities or new housing for you, or they may drive up rents or property taxes or otherwise push you out of your neighborhood. As others are reporting, the tax break is already subsidizing projects that probably didn’t need it and won’t do much to help poor communities, though it’s early days yet and cities still have a chance to sway the incoming dollars into projects that will be more beneficial for more people.
A lot will depend on what your city does (or fails to do) in response to the tax break. Some have already done quite a lot, including Washington, D.C. While all other local U.S. governments had to make suggestions to a governor’s office, D.C. Mayor Muriel Bowser submitted D.C.’s Opportunity Zone census tract designations to the U.S. Department of the Treasury in mid-2018.
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by OSCAR PERRY ABELLO
OCTOBER 1, 2019