There’s good news for some of the low-income and high-poverty areas that were designated as opportunity zones last spring.
According to an analysis by Zillow, these areas have seen a surge in sale prices since they received the designation as investors, keen to receive a discount on capital gains taxes for investing within these areas, flock to these opportunity zones.
According to Zillow, sale prices in all eligible areas “Grew faster than prices in places that weren’t, but after opportunity zones were selected, price-growth trends diverged among eligible tracts.” The report revealed that areas that were eligible but had not been chosen as opportunity zones saw a slowdown in sale price appreciation, while prices in designated opportunity zones grew by more than 20 percent annually.
The government’s opportunity zones program is intended to revitalize low-income or high-poverty areas by spurring investments in them. The report indicated that of the tens of thousands of eligible census tracts, 8,700 areas across the country were selected by state governors and certified by the Treasury Department as opportunity zones. Since there are no rules that investments must be spread equally across the zones, the report indicated that some opportunity zones could see more residential real estate development activity than others.