U.S. Senator Booker Champions Opportunity Zones to “Move Capital Off the Sidelines” into Distresses Communities
President Donald Trump’s new provision in the administration’s tax bill plans to transform distressed communities, Opportunity Zones, by bringing in private funding. Opportunity Zone investors will receive tremendous tax breaks if they build warehouses, housing, offices, parks, etc. The goal of Opportunity Zones is to incentivize investors to help decrease poverty in distressed communities that have economic potential but high unemployment.
There are mixed predictions on whether or not Opportunity Zones will succeed in transforming distressed communities
According to U.S. Senator Tim Scott (R-SC) who sponsored the provision in the tax bill, “The key factors that have led to our uneven recovery are education, infrastructure, and workforce development. Can I address those three pillars by putting a target, a positive target, on distressed communities? Can I address those three issues and make a profit [as an investor] while also doing good?”
U.S. Senator Cory Booker (D-NJ) supported Scott’s Opportunity Zones proposal. According to Booker, the law “Will move capital off of the sidelines into places that haven’t been getting it, like the three in five distressed communities that have seen job losses between 2011 and 2015, while the country as a whole added 10.7 million jobs.”
The provision aims to help not the most struggling places in the country, but instead those areas that are not entirely distressed but already somewhat gentrifying.
However, others worry that this provision is unlikely to help the country’s most distressed communities, such as Flint or Detroit, Michigan. Opportunity Zone investment could “supercharge” investment in places that were already growing, intensifying the regional inequality it was intended to remedy.
Some believe that using private dollars to fix public policy may not be the right choice to help all in need communities.
Growing regional inequality has contributed to extreme political effects, with economic disparities driving politically moderate elected officials from office. This has led to polarization in many swing states, as seen in Pennsylvania, Michigan, and Ohio in the last presidential election.
Trump’s victory may be attributed to his strong support from struggling rural and industrial areas, the very areas where these opportunity zones most likely are to be located.
New Jersey already has 169 Opportunity Zones designated by Governor Phil Murphy. The Opportunity Zones are located in 75 municipalities spread over each of New Jersey’s 21 counties. The Opportunity Zones include parts of almost all of New Jersey’s major cities.
New Jersey faces an affordable housing crisis and Opportunity Zones are targeted to some of the areas that most need relief.