Opportunity Zones were conceived in the midst of a deeply uneven recovery that followed the Great Recession and designed to help meet the needs of communities traditionally deprived of investment dollars. The incentive is structured in a way that encourages investors to redeploy capital gains from successful investments into new, long-term investments in the kinds of struggling communities that they would normally overlook.
The concept of Opportunity Zones was originally outlined in a 2015 paper, “Unlocking Private Capital to Facilitate Economic Growth in Distressed Areas,” co-authored by a bipartisan pair of economists, Kevin Hassett and Jared Bernstein. The policy as we know it today is based on the bipartisan Investing in Opportunity Act, which was championed by Senators Tim Scott (R-SC) and Cory Booker (D-NJ) and Representatives Pat Tiberi (R-OH) and Ron Kind (D-WI), who led a regionally and politically diverse coalition of nearly 100 congressional cosponsors in the House and Senate. The bill was first introduced in 2016 in the 114th Congress and reintroduced in 2017 in the 115th Congress.
After the policy was enacted in 2017 as part of the Tax Cuts and Jobs Act, governors formally nominated Opportunity Zones in their respective states and territories. The Treasury Department certified the national map of Opportunity Zones designations in June 2018, and the IRS promulgated final regulations governing the use of the incentives in December 2019.