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by Kenan Fikri and Catherine Lyons
Summary
The Opportunity Zones (OZ) tax incentive has proven it can move capital and reach communities. More than $112 billion in OZ equity has been deployed, and 77 percent of all originally designated census tracts have attracted investment. At the time of writing, governors were working actively to designate a second round of OZ tracts, setting a map that will guide billions of investment in the years ahead. But designation is only the beginning.
This guide offers a practical framework for state and local governments, economic development organizations, financial institutions, and community stakeholders to translate their OZ designations into lasting economic impact. The strategies are organized into four mutually reinforcing steps:
- First, cultivate the investor base and civic infrastructure needed to attract capital;
- Second, prepare the regulatory and physical environment so capital can land efficiently;
- Third, get directly involved at the project level to help the highest-impact deals cross the finish line; and
- Fourth, multiply the benefits once investment starts to flow — connecting local entrepreneurs and workers to new opportunities and providing the ongoing education and technical assistance that keep stakeholders engaged.
The strategies here are drawn from best practices across the country. Critically, most of them are not OZ-specific. OZs provide the impetus for getting started now, and OZs dial up the expected rewards for doing the work, too. But these strategies are broadly applicable, intended to build durable economic development capacity that will serve communities well beyond any single federal incentive.
