10 Things Economic Development Developers Must Know About Opportunity Zones
20 Apr 2021
News, Opportunity Zone
Ten things economic developers must know about Opportunity Zones include what an Opportunity Zone is, how many there are, your role in attracting investors to your community, and more. Let's walk through them.
10 Things You Need to Know About Opportunity Zones
1. What Exactly is an Opportunity Zone?
According to the U.S. Economic Development Agency, "an Opportunity Zone is an economically-distressed community where private investments, under certain conditions, may be eligible for capital gain tax incentives."
Residents who live in areas designated as Opportunity Zones tend to suffer from unequal economic growth and access to capital. Opportunity Zones are designed to spur economic development by giving investors tax benefits.
2. There Are More Than 8,700 Opportunity Zones Investors Can Choose From
With Opportunity Zones in all 50 states, Washington D.C., and five U.S. territories, there are a lot of opportunities for investors to choose from. You need to stick out.
3. There Are People In Your Community Who Live In Opportunity Zones
From an August 2020 Council of Economic Advisors report:
- 35.2 million people live in Opportunity Zones
- 28.9% of the people who live in Opportunity Zones live in poverty
- 98% of all economic districts have an Opportunity Zone
4. Getting People to Invest in Your Opportunity Zones Will Improve the Quality of Life for Residents
Research by the Economic Innovation Group found distressed communities will benefit from economic growth and the residents will see quality of life improvements. Investments in Opportunity Zones can address persistent challenges in the areas of:
- Lagging income growth
- Life expectancy
- Education disparities
- Clean Energy
5. What Investors Gain by Investing in Your Opportunity Zone
Investors that hold an Opportunity Fund investment for at least five years before the end of the deferment period can reduce taxes owed on the capital gain invested in an Opportunity Fund by 10%. If the Opportunity Fund investment is held for at least seven years before the end of the deferment period, the tax liability owed on this capital gain can be reduced by a total of 15%.
6. How Much Money Is Out There?
U.S. investors hold approximately $2.3 trillion in unrealized capital gain that can spur significant economic growth if deployed into Qualified Opportunity Zones. These investments will be directed by communities that can demonstrate need and attract capital - instead of Federal programs that are slow to deliver.
7. What Are Investors Looking For?
Investors are always looking for opportunities. You can engage their interest by providing them with extensive, research-based information that ties their investment into your community's broader development strategy. A community with a smart Opportunity Zone prospectus and multi-year plan comes across as a strong partner to investors who want to minimize risk.
8. Your Role as an Economic Developer is Getting Investors in Your Community's Opportunity Zones
As an economic developer, your job is to create a research-based Opportunity Zone Prospectus to market your community's unique benefits. This prospectus is designed to familiarize investors and developers with your Opportunity Zone. Golden Shovel Agency can guide you through this process efficiently and offer strategic solutions.
9. You Don't Have to Figure This Out All By Yourself
As the national leader in economic development strategy and marketing, Golden Shovel Agency is ready to help you create an effective Opportunity Zone marketing plan that aligns with the goals you have to make sure every part of your community thrives. Our professional team, economic development experience, and cutting-edge marketing tools and strategies have earned the trust of over 240 communities in the United States, Canada, and the Caribbean.
10. How To Get Started Marketing Your Opportunity Zone
Of the 10 things economic developers must know about Opportunity Zones, this is the easiest one. Just give us a call! We're happy to talk and answer any questions you have.