Many areas across the U.S. are suffering economically. There are few jobs and little investment in the area. That’s why opportunity zones are a good idea. However, the zones need support from the community to be successful.
The Facts on Opportunity Zones
Many cities seized this initiative to revitalize troubled areas. The city confers with community leaders and business people in each opportunity zone. The parties work together to identify projects that will increase jobs and give the area a facelift. Further, opportunity zones near me are identifying potential investors. Opportunity zone projects are a win-win for the community and investors. The U.S. has some 8700 opportunity zones in rural and urban areas. Indeed, almost all of Puerto Rico is an opportunity zone due to Hurricane Maria’s devastation.
Benefits
The community gets jobs and growth while the investor receives certain tax benefits. For instance, investors can put off paying taxes on capital gains until 2026. There are additional benefits if investors keep the property for a certain period of time. For example, for investors who hold onto the property for ten or more years, you don’t have to pay taxes on capital gains. Additional goals of opportunity zones include:
- · increase in average wage
- · crime reduction
- · increase in household income
- · positive environmental impact
Basically, the projects should improve the lives of the less fortunate.
Community Support
Projects need support from the local community to thrive. Sometimes, local zoning laws need to be relaxed to encourage investments and growth. Further, the same goes for permitting and licensing. It’s a good move to put together an organization to market projects to investors. Use social media, television, and newspapers to spread the word. Likewise, programs need to be developed to make sure the area has a trained workforce.
Use available resources to attract entrepreneurs to opportunity zones. Many developments will have to be new businesses. Some local and state governments use industrial revenue bonds to attract developers. The bonds can be used to fund construction and buy machinery and other equipment. Tax abatement programs are also attractive to investors. These programs give entrepreneurs a break on sales and income taxes.
Opportunity Zone Project Examples
Here are some examples of projects. Some four acres of contaminated property in Lansing, Michigan are being transformed. Capital City Market promises to make the area look a lot better. It’s a four-story mixed-use building that includes a hotel and affordable housing. In addition, the development includes a grocery store. This is important because many opportunity zones are food deserts. The project is funded, in part, by local funds aimed at improving food and housing availability.
Atlanta is home to 26 opportunity zones. The city is actively courting developers and entrepreneurs. The Rockefeller Foundation awarded Atlanta nearly a million dollars to promote opportunity zone projects. One developer plans a 74-acre mixed-use development in Atlanta’s struggling westside. Further, a film company plans to build recording studios and sound stages on its opportunity zone property. Atlanta has several organizations and community partners working with the government to attract development.
The long-term success of opportunity zones is yet to be seen. Nonetheless, the program is attracting investors who want to make a difference and a profit. What is planned for opportunity zones in your area? There may be an investment opportunity for you or someone you know.