Did States Maximize Their Opportunity Zone Selections?

Brief

Did States Maximize Their Opportunity Zone Selections?

Analysis of the Opportunity Zone Designations

Abstract

The Tax Cuts and Jobs Act included a new federal incentive—Opportunity Zones—to spur investment in poor and undercapitalized communities. Governors (and the mayor of the District of Columbia) have now selected which among the roughly 56 percent of eligible census tracts in the US should be classified as Opportunity Zones. While many criteria could be used to assess how successfully governors targeted Zones, we offer two for consideration: need and benefit. In this brief we gauge governors’ selections against tract measures of the investment flows they are receiving and the social and economic changes they have already experienced.

This brief was updated on July 12, 2018. The shares of people age 25+ with a bachelor’s degree or higher in table 3, along with the share of low-income communities designated as Opportunity Zones in table 1, have been changed to correct a previous coding error. In addition, the original brief mentioned that the US Treasury had not approved Opportunity Zones for Florida, Nevada, Pennsylvania, and Utah. The Treasury has since approved these states’ Opportunity Zones, so that mention has been deleted. The designated tracts in Florida, Nevada, Pennsylvania, and Utah mapped so closely to the proposed tracts that no data in the brief were affected.

Zones investment score dataset (.xlsx download)

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