Senator Scott’s Opportunity Zones Drew Billions of Investments to Thousands of Low-Income Areas
WASHINGTON – Today, Economic Innovation Group (EIG) released an analysis of two recent studies on the impact of Opportunity Zones (OZs) on America’s underserved communities. These studies found that by the end of 2020 at least $48 billion had been invested in nearly 4,000 opportunity zones across every state nationwide, increasing commercial and residential development, boosting housing supply and values, and creating positive economic spillovers for neighboring communities.
Providing tax incentives for investments in designated OZs was a part of Senator Tim Scott’s (R-S.C.) signature work in the Tax Cuts and Jobs Act of 2017.
“Opportunity Zones embody the good work leaders can do for communities across the country when government gets out of the way and allows us to work together,” said Senator Scott. “Investments in these underserved areas make a huge impact on communities – to the tune of billions of dollars. I’ll never stop fighting to build on the incredible work this program has done and help create a better future for all Americans.”
The report highlights several major findings, including:
- Total OZ equity investment reached at least $48 billion by the end of 2020. This capital was raised from roughly 21,000 individual and 4,000 corporate OZ investors and deployed into 7,800 Qualified Opportunity Funds.
- OZ investment reached approximately 3,800 communities from mid-2018 through 2020, representing nearly half of the total number of designated OZ communities nationwide. By comparison, it took 18 years for New Markets Tax Credit (NMTC) investments to reach an equivalent number of communities.
- OZ investment is going to communities that are substantially more economically distressed than the rest of the country. Ranked from lowest to highest levels of need, these communities average in the 87th percentile for poverty, 81st for median household income, and 80th for unemployment.
- OZ designation caused a “large and immediate” increase in new commercial and residential development activity with the likelihood of investment in a given month jumping by over 20 percent in designated tracts across 47 studied cities.
- OZ designations carried positive economic spillovers into neighboring communities and boosted development at a city-wide scale rather than crowding out local activity.
- OZ designations improved local home values by 3.4 percent from 2017 to 2020 with no observed increase in rents, in addition to boosting the supply of housing.