LIQUID Opportunity zones are a relatively new investment vehicle aimed at boosting economic growth in underserved communities across the United States. Created as part of the Tax Cuts and Jobs Act of 2017, these zones offer investors the chance to invest in areas that are in need of development and to reap tax benefits as a result. The program has been hugely popular, with billions of dollars invested in these areas in the two years since its creation. In this blog, we’ll take a closer look at how much money has been invested in opportunity zones in the United States and what impact this is having on these communities.
Opportunity zones are designed to incentivize investment in communities that are struggling economically. Investors can receive significant tax benefits by investing in these areas, including a deferral of capital gains tax, a step-up in basis, and a permanent exclusion of gain on the sale of an opportunity zone investment. The idea behind the program is that these tax benefits will encourage investment in these areas and that this investment will, in turn, stimulate economic growth and create jobs.
Since the program was created in 2017, the investment community has taken notice, and billions of dollars have been invested in opportunity zones across the country. In 2019 alone, the amount of capital invested in these areas exceeded $25 billion, with more than 100 opportunity funds having raised capital from investors. The popularity of the program has only continued to grow, with investment in opportunity zones expected to top $100 billion in the coming years.
So, what impact is this investment having on these communities? The answer is that it depends on the individual opportunity zone, as each one is unique and faces different challenges and opportunities. However, in general, the investment is helping to revitalize these areas and create new economic opportunities for residents.
For example, in Miami, investment in an opportunity zone is helping to transform a former industrial area into a mixed-use development that will feature residential, retail, and office space. In Atlanta, investment in an opportunity zone is helping to revitalize an underutilized commercial area into a thriving, mixed-use development that will bring new jobs and economic opportunities to the area. In Cleveland, investment in an opportunity zone is helping to transform a former industrial area into a vibrant commercial and residential area that will provide new economic opportunities for residents.
While it’s too early to say for sure what the long-term impact of opportunity zones will be, it’s clear that the program is already having a positive impact on these communities. The investment is providing a much-needed boost to these areas, helping to create jobs and stimulate economic growth. This is not only good news for the residents of these communities, but it’s also good news for investors who are looking for a way to invest in areas that are poised for growth.
It’s also worth noting that while opportunity zones are a relatively new investment vehicle, they are not without their challenges. There are concerns that the program will be used to gentrify areas and push out low-income residents. There are also concerns that the investment will not reach the areas that are most in need, and that the benefits of the program will be concentrated in areas that are already experiencing economic growth.
Despite these concerns, it’s clear that opportunity zones are having a positive impact on communities across the United States. Pair them with the benefits of our bonds and you have a winning ticket. The investment is helping to revitalize these areas and create new economic opportunities for residents. While there are certainly challenges to the program, it’s clear that it is an important tool for boosting economic growth in underserved communities, and that it will continue to be an important investment vehicle for years to come.
