How to Maximize Your Opportunity Zones
Last Friday the final details of “Opportunity Zones’ (OZ’s), a much talked about provision of last year’s $1.5 trillion tax overhaul, were revealed. The zones are a tax incentive designed to attract capital to areas where growth has been historically slow. With the details of the program now outlined it is more important than ever for city builders to think strategically about how this new tool can influence and shape growth in our communities.
1. ALL GROWTH IS NOT GOOD GROWTH
Be wary of the term ‘job creating projects’. Too often this is how developers, investors and elected officials sell ‘catalytic’ projects. Projects that too often are poorly designed and don’t actually create ‘new jobs’ but instead simply move people (jobs) from a nearby neighborhood or municipality. Additionally, these jobs too often aren't entry level nor do they include opportunities for career advancement. OZ’s offer us a chance to reshape our local economies in a truly catalytic fashion that grants true opportunities for developers, investors and most importantly long-term residents.
2. THE EXPERIENTIAL PROSPECTUS
The money from OZ’s will not automatically flow to opportunity zones. To attract money there needs to be attractiveness. This is where Demand Discovery and Phase Zero work is critical. There has been a lot of talk about creating plans and prospectuses, but instead of another document we should be thinking about creating a real-life experiential prospectus. Inclusive demand creation and activation coupled with smart storytelling and branding can lead to smart small projects that make a powerful statement to investors and developers about where they should be and who we are. This creates faster and smarter growth while also ensuring that the community is a partner in the change.
3. ALIGNING INVESTMENTS
Public funding is finite. This fact is becoming more and more relevant to slow growth cities with growing investment needs and a flat tax base. This is why it will be imperative for the public sector to match OZ investments in projects that further long-term objectives related to strategic smart growth and the priorities that are relevant to the future of the place. The fastest growing cities are leveraging their funds with the private and philanthropic sectors. As investments begin to pour into OZ’s, the cities that ensure that private and philanthropic funds align with public sector funds and objectives will prove to be examples of success in the years to come.