Op­por­tu­nity Zones can at­tract af­ford­able hous­ing

Orlando Sentinel - - OPINION - By Spencer Las­day By Daniel Molina

Par­ti­san­ship on Capi­tol Hill is at an all-time high, but if there’s one thing in the Trump ad­min­is­tra­tion’s 2017 Tax Cuts and Jobs Act that both sides of the aisle can get be­hind, it’s the cre­ation of Op­por­tu­nity Zones. This part of the TCJA didn’t cap­ture much me­dia at­ten­tion — most peo­ple were fo­cus­ing on the new tax brack­ets — but OZs none­the­less cre­ate am­ple room for wealth cre­ation.

Op­por­tu­nity Zones are eco­nom­i­cally dis­tressed cen­sus tracts that aim to at­tract pri­vate in­vest­ment by em­ploy­ing a mix­ture of fed­eral, state, and/or lo­cal tax in­cen­tives and de­fer­rals on in­vest­ments made with el­i­gi­ble cap­i­tal gains. Con­cep­tu­ally, OZs fa­cil­i­tate up­ward mo­bil­ity, some­thing both Democrats and Repub­li­cans sup­port.

A care­ful look at so­ciode­mo­graphic trends dur­ing the re­cov­ery years of the Great Re­ces­sion re­veals that lower per­form­ing ZIP codes grad­u­ally lost their pop­u­la­tions to more pros­per­ous ones, while higher-pay­ing jobs be­gan con­cen­trat­ing in large metropoli­tan ar­eas.

An anal­y­sis by the D.C.-based Eco­nomic In­no­va­tion Group found that the top­per­form­ing 20% of pros­per­ous ZIP codes added more busi­nesses dur­ing the re­cov­ery years than the re­main­ing 80% of ZIP codes, com­bined. From 2012 to 2016 alone, eco­nom­i­cally dis­tressed ZIP codes lost 13,300 busi­nesses, while pros­per­ous ones gained over 180,000 new busi­nesses.

Op­por­tu­nity Zones were cre­ated to ad­dress those is­sues of pop­u­la­tion loss and de­clin­ing eco­nomic dy­namism. To tackle those trends in Florida, Gov. DeSan­tis ap­por­tioned 427 zones across the state, 12 of which are in Or­lando proper and sev­eral more in the sur­round­ing ar­eas.

By driv­ing pri­vate in­vest­ment to­wards the oft-ne­glected parts of our state’s cities and ru­ral ar­eas, fresh rev­enue streams can breathe new life into the sur­round­ing economies and rein­vig­o­rate lo­cal tax bases.

Ac­cord­ing to a re­port by the Brook­ings In­sti­tu­tion on the change in in­come among black pop­u­la­tions, me­dian house­hold in­come in the Or­lando metropoli­tan area’s black com­mu­ni­ties rose by al­most 22% since 2013.

The Op­por­tu­nity Zone des­ig­na­tion can fur­ther drive the de­vel­op­ment of an­chor in­sti­tu­tions such as schools, hos­pi­tals, and pub­lic trans­porta­tion in these com­mu­ni­ties; it is these an­chor in­sti­tu­tions that make up the sup­port sys­tem for a qual­i­fied and sta­ble work­force, and many OZs na­tion­wide lack suf­fi­cient ac­cess to these fun­da­men­tal pub­lic goods and ser­vices.

Or­lando’s own Rep. Anna Eska­mani is look­ing to lever­age OZs to al­le­vi­ate the mar­ket pres­sures fac­ing renters. Her call for adding tiny homes, mod­u­lar homes, and ac­ces­sory dwelling units to the Florida Build­ing Code would of­fer ver­sa­tile hous­ing op­tions for Or­lando res­i­dents.

Eska­mani and oth­ers have raised con­cerns with the gover­nor’s selec­tion of OZs, and have pointed to cases of OZ des­ig­na­tion mal­prac­tice. It’s un­clear how valu­able the tax break could be, and the pub­lic may never know given that the 2017 tax leg­is­la­tion as passed in­cluded no pub­lic re­port­ing re­quire­ments.

Eska­mani’s pro­posal comes at a time when more peo­ple in Florida and across the na­tion are lay­ing out so­lu­tions to the af­ford­able hous­ing cri­sis.

In the com­ing weeks, new res­i­dents will be­gin mov­ing into the first 120 mixed­in­come units of Par­ramore Oaks, an Op­por­tu­nity Zone project stem­ming from a part­ner­ship be­tween the City of Or­lando and In­Vic­tus De­vel­op­ment. While the Par­ramore Oaks de­vel­op­ment brings a va­ri­ety of hous­ing op­tions, Rep. Eska­mani be­lieves that the city must do the most it can to pro­tect his­tor­i­cal and cul­tural com­po­nents of the neigh­bor­hood.

With the right in­vest­ments, made with the in­tent of the leg­is­la­tion, Op­por­tu­nity Zones could si­mul­ta­ne­ously pro­pel Or­lando’s growth and im­prove our com­mu­ni­ties up and down the I-4 cor­ri­dor.

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