The Opportunity Zone program, part of the 2017 Tax Cuts and Jobs Act, has been touted as a key tool in revitalizing distressed communities. The Trump administration argues that giving tax breaks to investors to incentivize investments in certain struggling geographical areas will in turn benefit these communities and their residents.
Community advocates hoped that the next set of guidelines would fix this shortcoming and address community concerns, including the potential for gentrification resulting from displacement. On April 17, 2019,
Treasury released the second set of program guidelines, and businesses and groups that had lobbied for flexibility in claiming the tax breaks were generally pleased. Another major issue that was not addressed is the certification process for the Qualified Opportunity Funds, which are the vehicles by which capital gains are rolled over and then used to invest in the distressed communities.
On the contrary, Treasury is denying communities an oversight role and allowing any investors-with any purpose in mind, including a purpose that contravenes the well-being of the community-to self-certify. A clear-eyed read of the second set of guidelines makes evident that communities’ concerns have once again been left by the wayside.