Governor Deal has Until March 21 to Nominate Distressed Census Tracts for New Investment Opportunities
Co-authored by Meaghan Shannon-Vlkovic, VP & Southeast Market Leader and Olivia Barrow, Policy Analyst, both at Enterprise Community Partners
Congress included an exciting new opportunity for community revitalization in the massive tax package passed at the end of 2017: Opportunity Zones.
Opportunity Zones are a new tax incentive that allow investors to defer paying taxes on capital gains if they place it into pooled “Opportunity Funds.” These Funds are the vehicle for investing in designated Qualified Opportunity Zones, which are distressed census tracts nominated by each state’s governor and approved by the Treasury Department. The designated zones could benefit from significant long-term capital that would spur job creation and economic growth.
The New York Times noted the exigency for this new tax incentive in a recent article, stating that one in six Americans lives in a distressed community. These areas – including urban, rural and suburban communities nationwide – are starved for capital, jobs and business establishments.
This is an exciting new development in our long-term efforts to revitalize distressed communities. There is no cap on the number of investments that can be made in Opportunity Zones, presenting a significant opportunity for the Atlanta region to benefit from an influx of private capital.
However, Governor Deal must strategically consider which census tracts to nominate. Once designated as an Opportunity Zone, the census tract will retain this classification for ten years, a powerful tool that could create new jobs, businesses, services, and a host of other impacts that support the economic vitality of our communities.
In Georgia there are 1,037 qualified distressed census tracts overall, which means up to 260 will be designated as an Opportunity Zone. In the Atlanta metropolitan statistical area (MSA) alone, though, there are 399 qualified distressed census tracts.
Enterprise Community Partners has created a national mapping tool to help stakeholders identify which census tracts are eligible for Opportunity Zone nomination.
Nominating census tracts in Georgia that demonstrate the capacity and willingness to equitably channel investments in distressed neighborhoods will be a cornerstone of this new tax incentive’s success. Further, leveraging the Opportunity Funds with current and planned investment has the potential to maximize resources and support the creation of thriving neighborhoods. For example, using Opportunity Fund investments as gap-financing in affordable housing and community development investments could provide the necessary capital to make these critical community investments feasible. Aligning with current place-based approaches, and other local initiatives such as transit, housing, healthcare, education, and employment opportunities, will be necessary for collective impact, growth and economic prosperity.
It’s important to organize and act now. Governor Deal only has until March 21 to nominate 25 percent of Georgia’s low-income census tracts to be designated as a “Qualified Opportunity Zone.” Because of the critical nature of choosing these census tracts, Governor Deal should immediately request a 30-day extension from the Treasury Department so that he has additional time to consult with local stakeholders, advocates and residents before making these important decisions.
If Governor Deal does not nominate census tracts or request a 30-day extension by March 21, Georgia will forego this rare opportunity to receive long-term, private capital. It is now incumbent on local stakeholders and advocates to not only urge Governor Deal to request the 30-day extension, but to also weigh in with Governor Deal’s office and make the case for much-needed community investments.