OZ Webinar Series | Opportunity Zones: Year Review and 2023 Look-Ahead
Categories:Analysis | Published On: December 22, 2022 |
On December 12, the Economic Innovation Group (EIG) hosted a webinar to discuss Opportunity Zones (OZ) highlights from 2022, and what lies ahead for the OZ industry and policy in 2023.
At the start of the webinar, Catherine Lyons, EIG’s Director of Policy and Coalitions, shared OZ updates and new resources including a marketing video from Prowers County, Colorado. The video was funded through the Colorado Office of Economic Development and International Trade’s (OEDIT) Opportunity Zone Video Spotlight Grant to help the community highlight its assets and attract investment.
Rachel Reilly of Aces & Archers then provided a review of policy and industry highlights from 2022. As it pertains to the OZ policy, 2022 notable events included the Treasury Inspector General for Tax Administration’s recommendation for improved processes and procedures concerning compliance and reporting requirements, as well as the introduction of the Opportunity Zones Transparency, Extension, and Improvement Act. Industry highlights included a mix of high-impact OZ initiatives, such as The Emerald Affordable Housing OZone Fund—a $110 million fund for Low Income Housing Tax Credit projects in California’s high-cost communities.
Guest speaker John Sciarretti of Novogradac shared the latest results from Novogradac’s Qualified Opportunity Funds (QOFs) Survey Report. As of September 2022, QOFs surveyed by Novogradac had raised more than $32 billion in OZ equity, and residential real estate remained the most popular target asset type amongst OZ investors and fund managers. Sciarretti also shared insights on how investors and fund managers have responded to changes in the project finance landscape this year, largely attributed to rising interest rates and construction costs.
Lyons then closed the webinar by providing an overview and status update for the Opportunity Zones Transparency, Extension, and Improvement Act. As of the recording of the webinar, Congress was focused on finalizing a year-end spending bill. Lyons explained that the most likely vehicle for passing OZ legislation is a tax extenders package, which could be attached as a rider to an Omnibus spending bill. If the OZ legislation failed to pass by the end of 2022, a new bill would need to be introduced for consideration during the 118th Congress.
Update: The omnibus does not include a tax title, meaning that the OZ legislation cannot be included in the end-of-year package. Congress will attempt to address important tax provisions early in the new year, and hopefully there will be an opportunity for the legislation to be included in that effort.