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  • EIP & EIG

Opportunity Zones: Destiny or Displacement

The nomination and designation process for Qualified Opportunity Zones (QOZs) in middle and low income communities and the effects that they may have on those communities. These opportunity zones have the capabilities of bringing capital flow into communities that have historically had trouble accessing capital. Communities must both strive to attract this new capital and ensure that low and moderate income residents can afford to remain in their communities as they are developed and not merely be displaced to other disinvested areas.

Taking into account the degree of variation within Qualified Opportunity Zones is increasingly important to understanding the types of investments that can lend the greatest benefit to each low income community.

Qualified Opportunity Funds offer a broad range of possibilities for investment as there are few restrictions on the types of activities and projects that Opportunity Funds can finance.

Capability of Offering Unique Tax Incentives

Qualified Opportunity Zones have the capabilities of offering unique tax incentives that offer unique tax incentives for its investors while also benefiting the low income community that it is meant to serve. With the primary goal of bringing accessible capital into these communities it is expected to not only spur investment and development within the Opportunity Fund but also in neighboring communities as the flow of capital into these new areas are bound to affect them as well. As the direct impact of these Opportunity Zones is still to be seen it is important that these areas are not only used by investors for their potential tax gains but also as a way of restoring capital into areas that are currently lacking. Increased community involvement not only adds an element of inclusivity to the process of decision making but also provides the opportunity for collaborative efforts of the part of local government as they can help to make Opportunity Zones more attractive with the addition of other bonds and tax credits that may be available.

By Marshall Garcia, Fellow

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