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Urgent Call toAction by Rep. Mike Kelly, Sen. Tim Scott, and Sec. Scott Turner: Act swiftly to Preserve Opportunity Zones to avert imminent loss
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In 2017, an earth-shattering legislative move emerged as Congress passed the Tax Cuts & Jobs Act (TCJA). When President Donald Trump signed this groundbreaking law, it sparked a wildfire of economic growth unseen in decades. Wages surged, unemployment plummeted, and Americans enjoyed fatter paychecks upon reaching home.
Fast forward to eight years later, critical provisions from the TCJA are up for renewal. High on the list: Opportunity Zones, an impactful, bipartisan piece of legislation, turning overlooked communities into reality changers in real-time.
Opportunity Zones (OZ) initiative offers a unique opportunity to invest their capital gains earnings in economically neglected regions. With fresh investments eligible for preferential tax treatment, idle capital gains can now sow seeds of growth in areas starved of investment for years.
Now, some may argue these pro-growth tax incentives seem too good to be true. Yet, despite initial skepticism, Opportunity Zones have proven themselves by transforming communities, creating economic opportunities in America's poorest zip codes.
Erie, Pennsylvania might just be the poster child for the economic benefits and rapid changes that Opportunity Zones can bring about in a short span of time. Back in 2018, Erie's downtown ZIP code, 16501, was named the poorest in Pennsylvania and one of the poorest in the nation. However, the potential of OZs transformed this stigma into a catalyst for investment in the area.
Shortly after the TCJA was signed into law, a group of local residents recognized Opportunity Zones' potential to revitalize Erie. Major employers, local universities, and other organizations pooled resources to establish the Erie Downtown Development Corporation (EDDC).
The EDDC has harnessed over $115 million in private investment into downtown Erie, resulting in 108 new fully occupied residences, revitalizing over 100,000 square feet of commercial space, and establishing space for 25 new businesses. All told, $400 million of long-term capital investment is breathing new life into Downtown Erie.
These investments have a remarkable track record of boosting small businesses and residential areas while stimulating innovation in technology and manufacturing – industries where South Carolina stands tall. Projects like the South Carolina Technology & Aviation Center (SCTAC) have raked in over $6.1 billion in investments, creating more than 18,000 new jobs in the local community. Opportunity Zones: impactful indeed!
Video: Uncovering the real story of Opportunity Zones' amazing impact in transforming economically neglected communities.
In Oconee County, South Carolina, investors transformed an 1875-built textile mill along Lake Hartwell into 197 new residential apartments. This project also featured retail and recreational amenities, including the restoration of the historic dam and the creation of public green spaces and trails.
Nationwide, Opportunity Zones have funneled $89 billion to over $89 billion in private investment across more than 5,600 designated communities, resulting in the creation of over 500,000 jobs in the first two years alone. A report released March by the Economic Innovation Group (EIG) indicates that OZs "caused an increase of 313,000 new residential addresses (not counting units currently under construction) in designated communities from Q3 2019 to Q3 2024."
Moreover, the Council of Economic Advisors found that the Opportunity Zone designation itself caused a 3.4% increase in home values in these areas, which translated to an estimated tens of billions of dollars in new wealth for the Opportunity Zone residents who own their homes.
By empowering the private sector and slashing red tape, Opportunity Zones allow projects to move more swiftly and at less cost while addressing one of the most pressing needs in low-income communities: quality affordable housing.
From day one of the 2017 tax law, we knew Opportunity Zones would be a game-changer. It's made for shovel-ready projects in areas that need help the most. With 2025 just around the corner, the future is looking bright in places like Erie and Oconee County. The EDDC is planning a $22 million project featuring 37,000 square-feet of commercial office and retail space.
However, if Congress fails to extend TCJA and Opportunity Zone provisions expire, we could witness projects, years in the making, being derailed overnight, alongside the largest tax hike in recent memory.
It's vital that Congress extends, expands, and makes the 2017 tax cuts permanent so working families, small businesses, and communities nationwide can continue to benefit from this legislation – and tax cuts at large – for years to come.
[1] American Enterprise Institute - Early Results from the Opportunity Zones Program[2] Brookings Institute - Where have opportunity zones been designated?[3] Tax Foundation - Opportunity Zones: A Comprehensive Policy Overview[4] Urban Institute - Opportunity Zones: Update on 2019 legislation and early implementation challenges[5] Economic Innovation Group - A Recovery for America: Examining the Impacts of the Coronavirus Crisis and Opportunity Zones, Spring 2020 update
- The Tax Cuts & Jobs Act (TCJA) of 2017 triggered unprecedented economic growth, with wages rising, unemployment plummeting, and Americans experiencing fatter paychecks.
- In 2017, the TCJA marked the passing of a significant bipartisan legislation, creating Opportunity Zones (OZ), which have transformed economically neglected regions.
- The OZ initiative allows investors to capital gains earnings to seed growth in neglected areas with preferential tax treatment.
- Despite initial doubts, Opportunity Zones have succeeded in transforming communities and creating economic opportunities, even in the poorest American zip codes.
- Erie, Pennsylvania demonstrates the rapid changes brought by Opportunity Zones, transforming a previously stigmatized area into a catalyst for investment.
- After the TCJA was signed into law, the Erie Downtown Development Corporation (EDDC) has attracted over $115 million in private investment, resulting in the revitalization of commercial space and the establishment of new businesses.
- In South Carolina, Opportunity Zones have spurred projects like the South Carolina Technology & Aviation Center (SCTAC), attracting over $6.1 billion in investments and creating over 18,000 jobs.
- Nationwide, Opportunity Zones have funneled $89 billion to over 5,600 designated communities, creating over 500,000 jobs in the first two years alone, and causing an increase in residential addresses, home values, and new wealth for residents.
