Opportunity Zones, created by the Tax Cuts and Jobs Act of 2017, offer investors capital gains tax incentives to invest in any of the 8,764 eligible Census tracts (12% of all Census tracts in the U.S.). The Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution convened an invitation-only, on-the-record conference on Opportunity Zones on November 18, 2022, including presentations of four empirical papers and two roundtables. One roundtable asked: What data are needed to fully evaluate Opportunity Zones? The other asked: What does success for Opportunity Zones look like?
The agenda and a list of participants, not all of whom participated in the entire event, are at the end of this summary. The conference was supported by Arnold Ventures. The Hutchins Center was solely responsible for its content.
Among the highlights:
- The best data to measure the impact of OZs is collected by the IRS, but it is available only to Treasury and certain Congressional researchers, limiting the ability of outside, independent researchers to evaluate OZs.
- Researchers are, however, using commercially available real estate data to try to gauge the impact of OZs, but are constrained by the absence of information about whether particular investments are taking advantage of the tax incentive.
- Researchers need more extensive public reporting, like that required for SBA loans or the New Markets Tax Credit, to fully analyze OZs. Legislative changes are needed to require such reporting.
- Scholars disagree on how best to measure the success of OZs. Some focus on the flow of investment to a tract and the impact on real estate prices, arguing that will eventually benefit many zone residents. Others focus more on what happens to people who live in the OZs, including what happens to employment and incomes.
The Brookings Institution is financed through the support of a diverse array of foundations, corporations, governments, individuals, as well as an endowment. A list of donors can be found in our annual reports published online here. The findings, interpretations, and conclusions in this report are solely those of its author(s) and are not influenced by any donation.