What it Will Take for Opportunity Zones to Create Real Opportunity in America's Economically Distressed Areas

Abstract

The Opportunity Zone program, created by the Tax Cuts and Jobs Act of 2017, is intended to spur economic development in economically distressed areas through private investment. However, the program lacks critical safeguards to ensure that it will achieve that goal. This policy brief lays out four principles that impact investors, local governments, community organizations, foundations, and others with a stake in the economic progress of low-income communities can use to ensure that investments benefit the residents of low-income communities: (1) focus on places in need, (2) focus on non-real estate investments that make economic sense for low-income communities, (3) guide investments to meet public and community priorities, (4) build in transparency and accountability.

Keywords: Opportunity Zones, community development, economic development, place-based policy, impact investing

JEL Classification: H25, O18, R38, R58