The Lowdown on Low-income “Opportunity Zones”
Chasing the Chance in The ‘Hood
- Investors are suddenly sprouting faster than mushrooms in a moist wood in these “opportunity zones,” low-income neighborhoods which have been strategically picked to promote long-term economic growth.
- Unicorn-type tax incentives (yes, they really do exist) are being awarded to investors who commit to improving these neighborhoods – we’re talking building infrastructure, creating jobs, and, well, sprucing the place up a little.
- Of the fortune hunting investors who’ve answered the opportunity zone’s siren call, a whopping 2 in 5 (that’s good ol’ 40%, for those math buffs out there) have seen home prices in these neighborhoods inflate faster than a hot air balloon on a collision course with the mesosphere. And no, your glasses aren’t fooling you – this disproportionate growth happened in the last quarter of 2024.
A Capital Gain, or Pain?
- These tax breaks for investors haven’t exactly delighted everyone across the board. Little Red Riding Hood is now quaking in her boots at the prospect of economic wolves biting into her meager income.
- No surprise here, but the extravagant growth in real estate costs in the opportunity zones has boiled up some concerns about affordable housing – or rather, the potential lack thereof. Atlanteans (under-the-sea dwellers, not those from Atlanta) aren’t the only ones discovering how it feels not to have a patch of land to call their own.
- Folks are wondering whether the incentives are indeed creating jobs, or are they simply transforming into shiny golden eggs for the investors to sit on? It’s like the Goose that laid the golden eggs, only this time, it’s an entire neighborhood.
The “Hot Take”
Alright, ladies and gentlemen, pull up a chair because it’s time for the ‘Hot Take’. So, we’ve got “opportunity zones”, eh? Sounds more like ‘opportunity knocks’ for investors who fancy opening the door to some pretty glitzy tax breaks, if you ask me. While we’re all for growth and prosperity, the rising real estate costs following in the wake of this new trend seem to have given the concept of ‘gentrification’ a shiny new paint job and a fancy hat. It’s definitely interesting to see investors doing their best impression of Jack and the Beanstalk, watching their funds grow into a giant beanstalk (read: potential profits) overnight. But let’s not forget about dear ol’ Red Riding Hood and the wolves, shall we? If these zones shift from being a land of ‘opportunity’ for everyone involved to a pot of gold just for investors, we might need to consider calling in the Huntsman—preferably one equipped with some solid economic policies and effective, inclusive growth strategies.
Original article: https://www.inman.com/2024/02/14/more-areas-idd-for-redevelopment-see-big-home-price-gains/
