Will Opportunity Zones benefit cities?

[dc_denizen]

Opportunity zones, created by the trump tax bill last year, seem like they have the potential to incent a lot of new investment in American real estate, particularly in distressed markets.

Hedge funds are pouring billions in real estate investment vehicles to take advantage of the tax benefits of developing in these zones.

Do you think opportunity zones can make a difference in channeling investment to hitherto ignored markets?

Is there any evidence that opportunity zones are driving investment in your city/area?

Silverstein, Cantor Fitzgerald to raise nearly $2B Opportunity Zone fund

D.C.-Based Opportunity Zone Fund Focused On Development Around HBCUs

‘Opportunity Zones’ Offer Tax Breaks and, Maybe, Help for Communities

[James Bond Agent 007]

The same thing has been tried in various forms since, like, at least the 60's. Have any of these previous iterations done any good?

[Pedestrian]

Originally Posted by dc_denizen

Is there any evidence that opportunity zones are driving investment in your city/area?

We've long had our own "opportunity zone" on Mid-Market St, initially created to induce Twitter NOT to move to the suburbs to escape the city's 1.5% payroll tax. Now there are a number of other businesses taking advantage of the same opportunity to secape the tax including Dolby Labs, Square and, until recently Spotify.

But here's what the Chronical had to say about the new Trumpian OZ:

9 SF spots could see new buildings under federal tax-break program
Melody Gutierrez
March 2, 2018 Updated: March 2, 2018 8:37 p.m.

SACRAMENTO —

. . . On Friday, (former) Gov. Jerry Brown released a list and map of 798 census tracts across California that he says should be considered as Opportunity Zones. Nine locations encompassing 11 tracts are in San Francisco: at Treasure Island, Alcatraz, Angel Island, Chinatown, Visitacion Valley area, Mid-Market/Tenderloin, South of Market, Bayview-Hunters Point and around San Francisco State University.

Additionally, in the Bay Area, large swaths of Oakland, Richmond and Vallejo are being recommended, as well as parts of Marin City, Redwood City, Hayward and San Jose . . . .

. . . census tract data often put college campuses into low-income designations because students and graduate students are counted as poor. Under Brown’s recommendation, half of the Stanford campus in affluent Palo Alto is designated as a low-income area included as an Opportunity Zone . . . .

. . . mayors and governors can ensure local and state zoning laws direct investments to areas that benefit communities.

In California . . . that could mean affordable housing projects.

https://www.sfchronicle.com/politics...s-12724189.php

But in case it isn't obvious from the map,

very little of San Francisco falls into qualified Opportunity Zones

https://fundrise.com/education/blog-...-united-states


https://www.urban.org/urban-wire/ass...zones-bay-area

'cause people owning $400,000 houses obviously lack "opportunity".

[LouisVanDerWright]

There's already a bum rush to buy in the most well placed OZ's in Chicago. This is not the same thing as has been tried in the past. This time you essentially get to reset the basis of whatever your investment is after 10 years. This means if you buy up an area and gentrify the shit out of it making say $5 million of property gain value to $10 million, your basis is now $10 million after year 10 meaning you get a $5 million profit and pay no taxes, not even capital gains, on it.

These have been aptly nicknamed "gentrification zones" in Chicago as they are causing a gold rush type mentality to buy up literally everything that lies in any of the well placed ones in the city (and there are many near transit and already developing areas here).

[Obadno]

Originally Posted by dc_denizen

Opportunity zones, created by the trump tax bill last year, seem like they have the potential to incent a lot of new investment in American real estate, particularly in distressed markets.

Hedge funds are pouring billions in real estate investment vehicles to take advantage of the tax benefits of developing in these zones.

Do you think opportunity zones can make a difference in channeling investment to hitherto ignored markets?

Is there any evidence that opportunity zones are driving investment in your city/area?

Silverstein, Cantor Fitzgerald to raise nearly $2B Opportunity Zone fund

D.C.-Based Opportunity Zone Fund Focused On Development Around HBCUs

‘Opportunity Zones’ Offer Tax Breaks and, Maybe, Help for Communities

This is quite interesting, basically a totally overlooked little portion of the 2017 Tax law that is going to have a major impact on developments.

There has been a flurry of articles recently about it and the buzz around them, I first read about them maybe 5 months ago in a local publication. Becasue of the tax breaks offered in the "opportuinity zone" about half a dozen projects in the phoenix area (nothing major) have either been started or revived from the dead.

I think these zones will have a huge impact and most of them are located in low income areas, it remains to be seen how much locals will bennifit.

[C.]

I work in the development industry, and I've been completely taken by surprise how big of a deal these new opportunity zones are and how they're influencing development decisions.

I have no idea how it will affect communities, but I do know there are already tens of billions of investment dollars will be flowing into opportunity zones mainly for the highly favorable tax treatment within the next year or so.

Something to keep a close eye on...