New Opportunity Zones Designated Throughout Region to Spur Private Investment
The U.S. Department of Treasury has certified 63 census tracts designated as Opportunity Zones in our region that will provide multiple areas for private investment in low-income communities. The Opportunity Zones program is a recently-established community development program created by Congress to encourage long-term investments in low-income urban and rural communities, as part of the Tax Cuts and Jobs Act of 2017. Allowed investments include affordable housing, infrastructure, energy, community development, business operations, equipment, and real property. Opportunity Zones also present a potential new source of leverage for o ther state and federal investment in communities.
Overall, California has 879 total census tracts approved as Opportunity Zones. These designations remain in place for 10 years (until December 31, 2028). Qualified investors receive a federal tax incentive to reinvest capital gains into Opportunity Funds, which then invest in the Opportunity Zones. Investors receive a temporary tax deferral and other benefits tied to long-term holdings. The IRS is in the process of developing additional guidance regarding the program. It prepared a Frequently Asked Questions document in the interim. Click here for more information.