Opportunity Zones presenting substantial investment, development and growth potential
- An Opportunity Zone is a census tract identified as an economically-distressed community where new investments may be eligible for preferential tax treatment
- More than 600 of the proposed Opportunity Zones have market areas that already exceed the US median household income
- Roughly 2,600 are likely to outpace US median household income growth over the next five years
- Top Opportunity Zones for growth of high-income young adults are located in markets and submarkets such as Manhattan; Long Island City; Downtown Seattle; Philadelphia; Brooklyn; Jersey City; South Boston; and Washington, DC
- Lower-ranked Opportunity Zones for growth of high-income young adults are located in markets and submarkets such as New Orleans; Memphis; Brooklyn; Washington, DC; and Cleveland
Background on Opportunity Zones
Investors and developers are already using Opportunity Zones as an important piece of market analysis for 2019 acquisition and development strategies.
Opportunity Zones are census tracts targeted for enhanced economic development as a result of 2017 Tax Cut and Jobs Act. Investors may utilize a Qualified Opportunity Fund (QOF) for investing in these zones. Taxes can be deferred on any prior gains invested in a QOF until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026. If the QOF investment in held for longer than 5 years, there is a 10% exclusion of the deferred gain, which becomes 15% if the investment is held for at least 7 years. After 10 years, the investor is eligible for an increase in basis of the QOF investment equal to its fair market value on the date that the QOF investment is sold or exchanged.
The IRS recently published guidance on Opportunity Zone investing, and for more information on Opportunity Zones from the IRS, please visit https://www.irs.gov/newsroom/opportunity-zones-frequently-asked-questions.
Top ranking Opportunity Zones
StratoDem Analytics Portfolio Insights - US Opportunity Zones
Top Opportunity Zones for growth of high-income young adults are located in markets and submarkets such as Manhattan; Long Island City; Downtown Seattle; Philadelphia; Brooklyn; Jersey City; South Boston; and Washington, DC.
Lower-ranked Opportunity Zones for growth of high-income young adults are located in markets and submarkets such as New Orleans; Memphis; Brooklyn; Washington, DC; and Cleveland.
| Neighborhood/Market of Opportunity Zone | 25-39 HH with $100,000+ HHI growth 2018-2023** |
|---|---|
| Manhattan, New York | +2,200 |
| Long Island City, New York | +1,600 |
| Seattle, WA | +1,100 |
| Philadelphia, PA | +1,100 |
| South Boston, MA | +1,000 |
Top ranking Opportunity Zones for senior living
StratoDem Analytics Portfolio Insights - US Opportunity Zones
| Neighborhood/Market of Opportunity Zone | 80+ HH with $250,000+ HH net worth growth 2018-2023** |
|---|---|
| Arlington, VA | +43% |
| Charleston, SC | +39% |
| Miami, FL | +37% |
| Brooklyn, NY | +36% |
| Fairfax, VA | +35% |