The federal opportunity zone program has generated buzz from investors seeking tax breaks for putting capital in underserved communities, but for affordable housing developers who already work in those areas and utilize a host of existing government programs, the benefits are not quite as clear. AJ Jackson, JBG Smith executive vice president of social impact investments, who leads the developer’s efforts on the Washington Housing Initiative, said a bulk of the group’s time has been focused on projects to acquire and preserve existing affordable housing.
“Ironically, also has the potential to increase competition for the most distressed assets in those locations that we would like to acquire, improve preserve and put forward as workforce housing over the long-term,” Jackson said Wednesday at Bisnow’s D.C. Metro Affordable Housing Summit. D.C. Housing Finance Agency Executive Director Todd Lee also said LIHTC remains the best tool for affordable housing and it is unclear whether opportunity zone capital will be used for those projects.
The Department of Housing and Urban Development is actively seeking ways to make its financing tools align with the opportunity zone program, HUD Deputy Assistant Secretary for Multifamily Housing Lamar Seats said. “We’re looking at our lending programs right now and what improvements can we make in them to incentivize people to use our funding, use our guarantees to bring debt capital into the housing market, into opportunity zones.” MidCity has been working on a deal to bring opportunity zone investment into the project, Meers said, a sign the program can help create affordable housing units when they are inclusionary zoning components of market-rate projects.