EIG Media Contact: Reuben Francis | [email protected]
Washington, D.C. – A new working paper from the Economic Innovation Group (EIG) provides the first quantitative evidence that the Opportunity Zones (OZ) incentive has significantly boosted housing supply in designated low-income communities.
“These findings underscore that Opportunity Zones have become a powerhouse federal housing policy, accelerating new development in areas that have chronically lagged behind,” said EIG President and CEO John Lettieri. “Policymakers should recognize OZs as a critical tool for addressing the country’s housing supply crisis in a cost-efficient way.”
The analysis examines net residential address growth from Q3 2019 to Q3 2024 using data from the U.S. Department of Housing and Urban Development and the United States Postal Service. Its key findings include:
- Large Housing Boost: The OZ incentive caused an increase of 313,000 new residential addresses in designated communities from Q3 2019 to Q3 2024—roughly doubling their housing growth over that period. What’s more, the effects were still growing as of the end of our study period, meaning that our results do not yet capture “peak OZ” housing effects.
- Low Fiscal Cost: OZs are exceptionally cost-efficient. The subsidy cost for new housing directly attributable to OZs was roughly $26,000 per residential address—a fraction of the cost of traditional housing programs.
- A Sharp Turnaround: OZ communities are now producing new housing faster than non-OZ communities—a major change in trajectory compared to their pre-designation trends. These areas accounted for 8.9 percent of all new residential addresses nationwide from Q3 2019 to Q3 2024, a 37 percent increase in share over the previous five-year period. But for the OZ incentive, designated communities would have instead shrunk to merely 4.9 percent of new residential addresses nationwide.
The need to boost housing supply has become a rare area of agreement across the political spectrum, and yet the impact of one of the most significant economic development policies on the books remains poorly understood. Our findings reveal that the flexible, market‐driven approach of the OZ incentive has succeeded at mobilizing private capital at an unprecedented scale and cost efficiency.
To learn more, read the full working paper here, or see our concise analysis of the findings and their significance here.
About the Economic Innovation Group (EIG)
The Economic Innovation Group (EIG) is a bipartisan public policy organization dedicated to forging a more dynamic and inclusive American economy. Headquartered in Washington, DC, EIG produces nationally-recognized research and works with policymakers to develop ideas that empower workers, entrepreneurs, and communities.
