By Anayat Durrani
A bill to extend Opportunity Zones was introduced by Reps. Michelle Steel (CA-48), Burgess Owens (UT-4), María Salazar (FL-27), and Carlos Giménez (FL-26) on July 30. The Growth and Opportunity Act legislation aims to advance Opportunity Zones beyond their current expiration of 2026.
“I’m encouraged that Congress is seeing the value of Opportunity Zones as a viable economic development tool for both real estate and business development,” says Kostas A. Poulakidas, Partner, Taft Law.
There are over 8,760 low-income communities that are designated as Qualified Opportunity Zones in the United States, according to the U.S. Economic Development Administration. H.R. 4608 would provide for the designation of new qualified Opportunity Zones every ten years and a new Opportunity Zone tax incentive round would begin on January 1, 2027.
“Extending the deadline to invest in Opportunity Zones would serve to create further opportunities for both investors and QO Fund sponsors/developers and the respective communities to reap the benefits of this incentive,” says Brett D. Siglin, Jennings, Strouss & Salmon, P.L.C.
Extending Opportunity Zones beyond 2026 is an economic development tool
Opportunity Zones were created by the Tax Cuts & Jobs Act of 2017 and are an economic development tool that encourages private investment in distressed areas of the country that have struggled to attract investors.
Rep. Steel said, in a press statement, that Opportunity Zones are “an important tool that give more people the resources they need to grow” the American dream. Rep. Owens called Opportunity Zones “an invaluable economic development tool proven to boost investment and job creation in distressed communities,” and cited Utah's Fourth District as experiencing a strong pandemic recovery and increased growth due to the innovative mechanism.
“Opportunity Zones have been a massive success around the country, especially in neighborhoods like the one I grew up in,” said Rep. Salazar, in press statement. “The investments and opportunities created through this program have the potential to lift millions more Americans out of poverty. We must continue this crucial effort.”
Rep. Giménez urged Congress to continue making investments made in lower income and disadvantaged opportunity zones areas “a massive win for working Americans across this country.”
Using Opportunity Zones to revitalize poor communities
Opportunity Zones have seen an increase in interest and are viewed as a strong tool for development, growth and jobs. The White House Council of Economic Advisers estimated that $75 billion of private capital was raised by Qualified Opportunity Funds as of the end of 2019 and created half a million jobs.
“Hopefully, Congress will incentivize the much needed access to investment capital in these blighted areas which the Opportunity Zone program provides to communities, as well as reporting so we can further analyze the effectiveness of Opportunity Zones, especially for social impact projects that support environmental, social and governance (ESG) community investment,” says Poulakidas.
Powered by Froala Editor