By Grubb Properties’ Capital Formation Team
Opportunity Zones appear to be having the desired impacts on the underserved communities they were meant to help, according to a recent analysis by the Economic Innovation Group (EIG), a bi-partisan public policy organization dedicated to forming a more dynamic and inclusive American economy.
Created under the Tax Cuts and Jobs Act of 2017, Opportunity Zones were designed with a simple proposition – to encourage private investment in communities within the United States struggling to attract capital, create jobs, and elevate residents out of poverty.
State leaders designated 8,764 Census tracts across all 50 states and U.S. territories as Qualified Opportunity Zones where development would be eligible for the program’s tax incentives. By investing recently realized capital gains into a Qualified Opportunity Fund, an Opportunity Zone investor is eligible to receive two primary tax benefits:
EIG examined two recent academic studies that examined where OZ projects were located and what impacts they were having on their communities. The first study, authored by U.S. Department of the Treasury economists David Coyne and Craig Johnson, used preliminary IRS data for tax years 2018 through 2020 to gauge early OZ activity. The second, by University of California-Berkeley economist Harrison Wheeler, analyzed building permit data to examine the impacts of OZ projects on Opportunity Zones and the surrounding communities.
At Grubb Properties, we believe that essential housing as implemented in Link Apartments℠ satisfies both the letter and spirit of the Opportunity Zone program. Our targeted approach, geared to those in the middle of the income spectrum, improves neighborhoods without introducing excessive gentrification impacts while helping to address the serious housing crisis facing our nation.
Since we launched our Qualified Opportunity Fund program in 2019, Grubb Properties has raised more than $500 million for OZ investment, now consolidated in our Link Apartments Opportunity Zone REIT fund. We have 19 communities under development or in service in QOZs nationwide, and we look forward to continuing to improve communities in Opportunity Zones through essential housing.
For more information about the Link Apartments Opportunity Zone REIT, click here.