Entrenched and accelerating economic disparity is a defining challenge of our time. It is fueling a polarization in America that strains civil society and our political processes. Technology-driven efficiencies and globalization only exacerbate the problem, and are leaving behind huge swaths of the country that are sidelined from participating in the economy of our future:
- Less than 3% of US counties (73 out of 3000) produced more than half of the job growth since 2008.
- Two-thirds of distressed areas saw a decrease in jobs from 2000 to 2015.
- Only one in five distressed zip codes added business establishments between 2011 and 2015.
*Economic Innovation Group (2017 Distressed Community Index).
WHY OPPORTUNITY ZONES?
A little known part of the 2017 tax bill created unprecedented incentives to revitalize America’s most distressed communities. As a result of this legislation, all fifty Governors designated over 8,700 Opportunity Zones throughout the country – from rust belt cities to rural areas to parts of large urban centers – and investors can get significant tax benefits by investing capital gains in the zones. You can read more about the details of the program in the Opportunity Zone tab of our website.
With visionary leadership, Opportunity Zones can be a big step forward for the inclusion of all Americans in our civic and economic life. They can put new energy behind longstanding efforts to transform communities and local industries. But the Opportunity Zones will only achieve their potential if local leaders rise to the occasion. In the absence of early action though, the incentive could end up being mis-used or minimally-used. Taking a few early steps will help local leaders set the course for transformative community development.
The Governance Project helps state and local leaders build and execute thoughtful strategies to leverage Opportunity Zones for transformational and inclusive development.
EMERGING BEST PRACTICES
A paper authored by our advisors, Bruce Katz, Jeremy Novak and Jamie Rubin, emphasizes what states can do to help catalyze the Opportunity Zones.