Report Outlines Best Practices and Features Examples of Community Revitalization Occurring Across the Nation in Opportunity Zones
Dr. Ben Carson, Secretary of the U.S. Department of Housing and Urban Development and Chairman of the White House Opportunity and Revitalization Council (Council), delivered a report this month to President Donald J. Trump outlining Opportunity Zone best practices and examples of revitalization occurring across the Nation. On December 12, 2018, President Trump established the Council to support the Administration’s pledge to encourage public and private investment in urban and economically distressed areas, including Opportunity Zones. Since the Council’s one-year report was issued in December of 2019, the Council has taken approximately 80 additional action items-for a total of more than 270-to promote the mission of Opportunity Zones.
“On behalf of the Council, we are pleased to issue this report, which includes case studies and best practices observed by the Council across the country,” said Council leadership in the report to the President. “There are inspiring stories happening in real time, with action being taken by State governments, local governments, Qualified Opportunity Funds, public-private partnerships, and others to spur revitalizing investments in the areas of most need. This report will prove to be especially helpful and encouraging to communities as they continue to admirably fight the invisible enemy known as COVID-19.”
The Council’s report features months of hard work and observation of community redevelopment and nourishment. The report is divided into five sections and makes references to the newly released Volume Two of the Council’s Community Toolkit, which is also available on the “OpportunityZones.gov” website. The five sections of the report include the following: (1) Best Practices of Local Governments, (2) Best Practices of State Governments, (3) Best Practices of the Foundations and Non-Profits Making an impact in Opportunity Zones, (4) Best Practices of Qualified Opportunity Funds, and (5) Pairing Opportunity Zone Capital with Federal Resources. A brief description and excerpt of each of the five sections can be viewed below.
- Best Practices of Local Governments
The report features examples of communities that have put their residents’ voices first with respect to Opportunity Zones. It identifies several cities that have emerged as national leaders in the Opportunity Zones space. The best practices of local governments include utilization of existing community infrastructure and anchor institutions in accordance with revitalization strategies, and removal of unnecessary barriers to construction. Additionally, this section discusses projects planned for years that had languished until the Opportunity Zones incentive was established. The report looks beyond Qualified Opportunity Fund investments and considers the ways that Opportunity Zone communities have leveraged their designation for other types of investment as well.
- State-Level Actions Benefiting Opportunity Zones
The report identifies legislation and executive actions that States have taken to aid the Federal Opportunity Zones mission. The report further discusses the efforts of State agencies to become involved in the Opportunity Zones space, including through contests and competitions, and outlines ways that State-specific actions regarding Opportunity Zones have created certainty and stability for investors. The second section also features examples of State websites that offer a “matchmaking service” between investors and entrepreneurs in Opportunity Zones. Each State’s Opportunity Zones-related website link can be found on the homepage of the “OpportunityZones.gov” website.
- Foundations and Non-Profits Making an Impact in Opportunity Zones
The report offers examples of national foundations with billions of dollars in assets that provide support to Opportunity Zone communities and investors who seek to make a positive social and economic impact. It also offers examples of charitable organizations that are focused on issues within the Council’s work streams-issues like reentry for those who have served time in prison; housing affordability for those who are cost-burdened; and mentorship for at-risk youth.
The third section also highlights best practices of private financial institutions that have devoted considerable resources towards establishing unique and innovative tools that can help drive investment in Opportunity Zones and benefit communities across economically distressed areas, whether they be rural, urban, suburban, or tribal. For example, MasterCard’s Center for Inclusive Growth has developed a toolkit that reveals insights into the current state and potential for inclusive growth in Opportunity Zones across the country. Likewise, Citi has launched a data-driven platform to support Opportunity Zone investments by aggregating key social information about different Opportunity Zones. The report also references the teams that competed in the Opportunity Zones component of the 2019 Opportunity Project sprints, an initiative of the U.S. Census Bureau.
- Best Practices for Qualified Opportunity Funds
As the private sector engine of the Opportunity Zones initiative, Qualified Opportunity Funds are critical on the path towards revitalization. This report provides overviews of specific deals across the country, with the understanding that none of the examples identified are endorsed by the Council. This section considers different geographies, varying industries, and multiple ways that private sector investors have interacted with public sector counterparts, emphasizing examples of Opportunity Zone investments that correlate with the mission of the Council’s different work streams. Readers will discover how Qualified Opportunity Fund capital can be paired with other elements of a given capital stack and how those utilizing this new tax incentive can also leverage existing incentives for revitalization.
- Paring Opportunity Zone Capital with Federal Resources
The report traces many of the individual agencies that comprise the Council and focuses on the relevant work streams that drive the Council’s activities. There are case studies that describe the pairing of Qualified Opportunity Fund capital with Federal grants and outline how Federal resources have been used to host roundtables and workshops focused on the Opportunity Zones initiative. The report dives into some of the data that agencies have collected thus far. For example, this section discusses ways that the Opportunity Zones efforts of the U.S. Department of Agriculture (USDA) have helped bring broadband to underserved areas; how Economic Development Administration (EDA) grants have allowed rural tribal communities to welcome more tourists and fishermen; and the potential for better health outcomes experienced by Opportunity Zone residents via U.S. Department of Health and Human Services (HHS) grants. This section also highlights tools developed by Federal agencies for the purpose of benefiting Opportunity Zones through the sharing of information-such as EDA’s web-based tool, developed in partnership with Indiana University and its Kelley School of Business, and an interactive map by the U.S. Department of Transportation (DOT) that highlights Federal investment in major infrastructure projects located in and around Opportunity Zones.
This report closes by discussing Federal and private data resources for analysis by researchers and decision making for investors, communities, and policymakers. In its conclusion, the report looks both backward and forward. It assesses the current state of Opportunity Zone revitalization across America, and outlines what must be done to protect and expand the progress that has been made.
The report also makes clear that one of the important features of the Opportunity Zones incentive is its decentralized nature. Thus, the Council is not in a position to identify every single best practice, and this report should not be construed as an all-inclusive or exhaustive list of best practices and case studies. The Opportunity Zones incentive will be successful only if the voices and needs of each community and its residents are heard-a core belief of the Council’s mission.