Opportunity Zones 2.0 can do better than the original

Gov. DeWine’s decisions will define the program’s impact for the next decade

July 1 marked the beginning of Gov. Mike DeWine’s 90-day window for nominating Ohio’s next round of Opportunity Zones (OZs): low-income communities where investors receive tax breaks for qualifying investments. The new designations will replace the 320 Opportunity Zones selected by Ohio in 2018 and will shape where tax-advantaged investment flows for the next decade.

A new Policy Matters Ohio report finds that the original OZ program often failed to direct investment to the communities most in need and urges the governor to apply those lessons while he chooses the next set of qualifying census tracts.

“Opportunity Zones were created to bring investment to communities facing persistent poverty and disinvestment, but Ohio policymakers did not consistently target the areas with the greatest need,” said Aditi Srivastava, Policy Matters Ohio researcher and author of the report. “When Ohio selected its first round of Opportunity Zones, more than half of the 100 poorest eligible census tracts were left out. Instead, state officials gave preference to areas where developers were already investing, making it harder for any other neighborhoods to compete.”

The report also finds that many Opportunity Zone housing developments charged rents above those typical for the surrounding neighborhood and that most jobs created by the program nationally were offset by losses in nearby low-income communities.

“Gov. DeWine now has an opportunity to correct those mistakes,” Srivastava said. “He should prioritize neighborhoods experiencing the most concentrated poverty, avoid tracts already attracting substantial private capital, and ensure community members have meaningful input into investment decisions. Opportunity Zones should benefit communities where investments can do the most good, not subsidize development that likely would have happened anyway.”

The full report is available at https://policymattersohio.org/research/a-revamped-opportunity-zone-program-can-succeed-where-the-original-came-up-short/