An entirely new asset class is forming around investing in Qualified Opportunity Zones, but few funds have actually managed to capitalize on it and get money in the ground.
A provision tucked into the December 2017 tax bill allows holders of capital gains to shelter them from taxes for years by putting them in Qualified Opportunity Funds, which then buy property or business equity in designated low-income Qualified Opportunity Zones.
RBH started its Qualified Opportunity Fund in August, with $40 million from entrepreneurs David and Leila Centner, and closed on its first acquisition the next month. The Teachers Village Opportunity Zone Fund will build housing for teachers and other social-impact-related projects, across the country.
The fund was able to move fast because it was basically already doing it: RBH recently completed the Teachers Village in downtown Newark, N.J. Beit says he worked with then-mayor Cory Booker, now a senator and the co-sponsor of the legislation that created Opportunity Zones. The site in Chicago isn’t in an Opportunity Zone, but the legislation allows for 10% of a Qualified Opportunity Fund to be outside designated zones, so it fits within that exemption.
“Teachers Village is a solution for cities like Newark where we’re the first ones to start a neighborhood, if you will, or redevelop a neighborhood. But it’s also the same solution for cities like San Francisco.”
Anywhere where there’s a dearth of housing supply-due to a lack of development, or because teachers are priced out of the housing market – Beit sees these Villages as the solution.