Opportunity Zone Investment Is Still Flocking To Areas That Don’t Really Need It
March 21, 2022 | Bianca Barragan | Bisnow
When the opportunity zone program was created five years ago as an incentive for investors to pay closer attention to economically disadvantaged communities, critics worried the program would instead benefit wealthy taxpayers and leave out the disenfranchised neighborhoods that the program promised to lift up.
That concern appears to have come to life in California, specifically in Los Angeles, which has been a hot investment target for opportunity zone investors since the beginning of the program.
Opportunity zones were supposed to disrupt the traditional flows of capital and direct them toward struggling areas, but it appears OZ investment nationally is just following that same path, said Jorge González-Hermoso, research associate at The Urban Institute.
The Urban Institute did an early assessment of the program in 2018 that found that the program was skewed in favor of investments that have higher rates of return. An April 2021 study from two economists at the University of California, Berkeley, that looked at Internal Revenue Service data from 2019, right before the IRS issued final regulations for the program, found similar results.
