Senator Scott Praises Opportunity Zones’ Positive Impact at House Committee Hearing
WASHINGTON – Today, U.S. Senator Tim Scott (R-S.C.) gave the following remarks at a House Ways and Means Oversight Subcommittee Hearing on Opportunity Zones, which Sen. Scott championed in 2017 as a way to incentivize private investment in the poorest communities across the nation.
Remarks as delivered:
Thank you, Chairman Pascrell, as well as Ranking Member Kelly. Good afternoon to both of you, and thank you for allowing me to speak today.
Let me say this before I go on to my prepared remarks, that I do think it’s important for us to remember how we crafted the Opportunity Zones. One of the things that we did was we started with giving the governors—not the president, not Congress—the power of actually designating within their states where they wanted the Opportunity Zones to be. And that’s really important.
The second thing I think the chairman spoke about and Ranking Member Mike Kelly referred to as well [is] the importance of having reporting requirements. I think we all want reporting requirements, and I would encourage every single person out there who has a vote to vote yes for the IMPACT Act that would allow for us to have reporting requirements so that the IRS could say exactly what people are doing with the resources and the benefits and the incentives so that we can judge fairly.
Without those reporting requirements, there’s no possible way to have an honest, balanced hearing around the benefits that are really important to the poorest people in this country. And I say that as a kid who grew up in poverty, and I recognize there’s a lot of talent and a lot of potential in the poorest neighborhoods like the one I grew up [in] in Charleston, South Carolina, that might never see the light of day without an opportunity to succeed.
From my perspective there are two ways we can help facilitate the creation of opportunity for low-income areas. Option 1 is by government fiat—this is where the government confiscates money from the wealthy, cycles it through the federal bureaucracy while siphoning off government overhead costs, and then redistributing it—whatever’s left.
While the intentions behind this option might be good, we know this is a failed strategy. The poverty rate in the poorest parts of America since 1965 has been at best stagnant under that plan, and we never truly created a pathway out of poverty.
So the question is: is there a better way? I believe the answer is absolutely. And that’s why I worked in a bipartisan fashion to secure Opportunity Zones. This is our second, and better, option for ensuring investments [make] their way to the communities that need it the most, like the one I grew up in.
Why is this a better way? Well, first, you can measure the results. Look at the numbers. We’ve seen historic capital being poured into low-income communities. GAO notes that, in just the first year of Opportunity Zone programs, we’ve seen $29 billion—in 2019—$29 billion have been invested in low-income, high poverty, racially diverse areas.
Second, you can measure whether or not these communities are seeing people forced out—i.e. gentrification—or are they remaining where they are. Well, we know that the gentrification rate in Opportunity Zones is less than five percent, meaning that people are staying where they are, finding jobs, and seeing their standard of living increase, some for the first time in generations. That’s the power of OZs.
And lastly, you can see and hear from local leadership exactly what the impact has been.
Mayor Bowser here in Washington D.C., not to be confused with a Republican, stated:
“Through the Opportunity Zones program … we’re doing more to meet the needs of D.C. residents right now and preparing for our collective future.”
Mayor Stephen Benjamin of Columbia and the former president of U.S. Conference of Mayors has celebrated the opening of new businesses in his city saying:
“These Opportunity Zones in Columbia were some of the first in the nation—creating jobs for inner city kids.”
Mayor John Gettys, from Rockhill—a suburb of Charlotte, North Carolina, said [this] Opportunity Zone is providing him—for the first time in almost three decades—the ability to create affordable housing within the downtown part of his community. This plus local innovation is securing more investments for the future.
And finally, from Mayor Michael Tubbs, Democrat from California, he says:
“Opportunity Zones would be a way to not just invest in land and buildings, but to also invest in our people.”
Those are the voices of local leaders who are probably the best sources we have on the real-world impact of Opportunity Zones. But we also have data from the nonpartisan, apolitical GAO report that celebrates that “Opportunity Zones have lower income, higher poverty, and greater non-White” or, said different, majority-minority communities within their census tracts.
With Opportunity Zones, we get a package that has a punch! We are incentivizing the local business community to invest in their community rather than going somewhere else. And it’s not just about the financial impact; it’s also about empowering and inspiring innovation and securing a better future for the individuals living within the zones.
Places like the Charleston Tech Corridor that is helping create opportunities for local residents, where kids in the future can take coding classes and come out with world-class career opportunities. My neighborhood didn’t have that growing up, but now it does, thanks to OZ’s. OZ’s have helped communities across this country, from the south side of Chicago—yes, Mike Kelly—to Erie, Pennsylvania.
So overall, we can look at the facts about Opportunity Zones—not merely the rhetoric—and we are seeing businesses making historic investments in places with low levels of gentrification, and a place where local leaders are seeing and celebrating the positive impact.
As many on this committee know all too well, it is often when the federal government gets out of the way that true upward mobility is most dynamic—and that is exactly the function of Opportunity Zones. Thank you for this opportunity to speak about an issue that I have spent five years working on, and I am now celebrating the positive impact that [it] is having throughout this country.