“The mark of a great city isn’t how it treats its special places – everybody does that right – but how it treats its ordinary ones."
Opportunity Zones were created in 2017 as a way to channel capital into specific, low-income areas. Investors could permanently avoid capital gains taxes by investing pre-tax capital gains into OZs and holding assets long-term. Even the gains from the OZ investment itself could be protected from tax. Originally set to sunset in 2026, the program was made permanent last year with the signing of The One Big Beautiful Bill. Since inception, more than $100 billion, and maybe as much as $150 billion, has been invested in OZs.
But do they work? That is, have OZ investments brought economic benefits to the communities and to OZ investors? According to new research, OZ designation clearly drives appreciation: Asset value growth for multifamily, office and industrial assets in OZs “is significantly higher” than the overall market. Office properties sold for 9% more post-designation, compared to 6% for assets outside of an OZ. That positive delta was higher for industrial (6%) and multifamily (8%). OZs, the paper notes, “stimulated extraordinary investment.”.1
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