Opportunity Zones (OZs) have become the country’s largest place-based economic development incentive, directing capital into low-income communities through tax advantages. Yet five years into the program, relatively little is known about where investments are going and who benefits, partly because only a few states collect project-level data on OZ investments. We analyzed one of those state’s OZ investment patterns using the transaction-level data reported through Ohio’s state-level tax incentive between 2020 and 2024.

Why This Matters

Under the One Big Beautiful Bill Act of 2025, governors are required to nominate the next round of OZ tracts by July 2026, a once-in-a-decade opportunity. When the first designations were made in 2017, states had limited experience to guide their choices. Our analysis can help governors and other stakeholders understand how the OZ program is functioning in practice and can provide takeaways for governors looking to align future OZ designations with both investor interest and community need.

What We Found

Analysis of OZ activity in Ohio highlights both the potential and limitations of the OZ program. Our findings include the following:

• OZ designation does not ensure investment. Only 33 percent of designated OZs in Ohio received any investment between 2020 and 2024.
• Ohio investment was highly concentrated. In Ohio, 60 percent of OZ dollars flowed into just 2 percent of funded tracts. Over half the state’s total OZ capital went to just nine tracts.
• Investment flowed mostly into Cleveland and Columbus. Smaller metropolitan areas, micropolitan areas, and rural areas received much smaller shares of investment.
• Investment flowed more to tracts already demonstrating growth than to distressed tracts. Funded neighborhoods typically had more jobs, higher housing values, and faster growth in educational attainment and incomes before OZ designation than those that did not receive OZ capital.
• Some investment went to tracts that were not designated as OZs. We found 29 percent of invested tracts were not designated as OZs, suggesting that the program’s current rules may not direct capital to the places that need it most.

How We Did It

We analyzed Ohio’s Opportunity Zone application data, demographic and economic data from the American Community Survey, and employment data from the US Census Bureau’s Longitudinal Employer-Household Dynamics program.