Last week Mayor Keisha Lance Bottoms publicly announced a new federal zone initiative for the City of Atlanta. It is said the city will receive $920,000 in grants to establish and fund a Chief Zone Officer and the placement of two AmeriCorps members to facilitate community involvement. Atlanta is the second city to be chosen in The Rockefeller Foundation’s Opportunity Zone Community Capacity Building Initiative, which launched back in May 2019. This initiative’s main goal help U.S. cities to attract responsible private investment in economically-distressed communities. This will also ensure new investment delivers sustainable benefits for those living in those Opportunity Zones.
Six cities are set to receive these funds and support over the next two years. “Opportunity Zones are an exciting new tool for building economic development in underserved communities. These grants will help guide us as we implement the program to maximize the benefits of job creation and neighborhood improvement in the most vulnerable areas of our city,” said Mayor Keisha Lance Bottoms. “I am grateful to the Rockefeller Foundation for this commitment that will help advance equity in our city, as we continue to build One Atlanta, and provide a level playing field for all.”
Governors across all 50 states and territories designate low-income census tracts as “Opportunity Zones”. Investors then have the chance to take profits from current holdings and reinvest them in “Opportunity Funds,” which finance commercial and industrial real estate, housing, infrastructure, and current or start-up businesses located in the Opportunity Zones. After several years in the Fund, some of the tax on investors’ initial profits (capital gains) will be forgiven. And, the longer investors leave their money in the Fund, the more capital gains tax will be waived. If held for a decade, the added profit made from the Opportunity Fund investment will not be taxed at all.
Opportunity Zones are a bi-partisan policy innovation that have garnered a lot of attention. The program differs markedly from past tax incentive programs designed to improve low-income communities. It is market-driven, does not require impact reporting, and focuses on equity investments as opposed to traditional programs which focus on debt. And—because there is no cap to the number of Opportunity Funds that can be created nor limit to the total dollars that can be invested, Opportunity Zones have the potential to become the largest community development program in our nation’s history. Still, there’s much uncertainty about how much investment will flow into Opportunity Zones, what those investments will look like, and how they will impact people’s lives.
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