The U.S. Treasury Department has released new regulations for nearly 9,000 “Opportunity zones” that officials hope will unleash investment in the economically distressed areas.
Under the 2017 federal tax law, people can get a tax break for investing in certain businesses and properties located in the zones.
Treasury Secretary Steve Mnuchin said at the White House event that in addition to other changes, the new regulations will ensure that businesses that are headquartered in zones but do most of their sales elsewhere could qualify.
“But what we’re really excited about is the chance to build new businesses or expand existing businesses in opportunity zones.” But some local leaders and national economic development experts have expressed concern that most of the opportunity zone money will be spent in booming cities, and on real estate projects rather than businesses that could create jobs and economic growth over the long term.
Lawmakers in some states are considering bills that would create additional tax breaks to lure investors or encourage certain projects in zones, such as affordable housing or solar energy development.
Real estate prices in opportunity zones are up 20% since the zones were designated last year, he said, citing Zillow data.
Businesses are attracting investment, he said, highlighting a lumber mill in a Vicksburg, Miss., zone that recently reopened and started hiring again.