Tim Scott’s ‘opportunity zones’ drew $29B to low-income areas: ‘Changing the game’
Designated low-income areas known as “opportunity zones” that attract investments by offering tax-related benefits have resulted in positive impacts in many states across the U.S., generating tens of billions of dollars for the affected neighborhoods, according to a new report from the Government Accountability Office.
According to the GAO report, preliminary IRS data from 2019 showed that in that year, 17,891 investors contributed $28,910,000,000 in investments in more than 6,000 “Qualified Opportunity Funds,” which are investment vehicles dedicated to the more than 8,700 opportunity zones.
“Opportunity Zones are changing the game for thousands of communities across our country. Empowering the private sector to make direct investments in underserved communities is breathing life in neighborhoods that wouldn’t have happened otherwise,” said Sen. Tim Scott, R-S.C., a strong proponent of the initiative. “This new report further proves that the 2017 tax cut delivered relief for the most vulnerable Americans and stands in stark contrast to the devastating impact of Democrats’ reckless spending and taxing plans.”
The report was requested from both Democratic and Republican lawmakers, including Scott and Sens. Cory Booker, D-N.J., Chuck Grassley, R-Iowa, Ron Wyden, D-Ore., and Richard Neal, D-Mass.
One concern about opportunity zones was that it would lead to greater gentrification, but GAO only heard from one state that claimed that this was a problem for them.
In practice, the report said, qualified funds found that the tax incentive program appeared to lead companies “to invest in projects and locations that they otherwise would not have.”
The longer an investment is held in an opportunity fund, the greater the tax benefits.
The report did note that the coronavirus pandemic hurt some of the funds, as it delayed development activities. In some cases it hindered fundraising and in others, it made it difficult for properties to achieve full occupancy.