Enterprise Works with Congress to Ensure Successful Implementation of Opportunity Zones
This morning, Terri Ludwig, Enterprise CEO, testified before Congress on the new Opportunity Zones provision that was included in the Tax Cuts and Jobs Act of 2017. Appearing before the Joint Economic Committee (JEC), Terri’s message to Congressional members was clear: with the right regulations and guardrails in place, Opportunity Zones have the potential to bring catalytic change to some of the nation’s most distressed neighborhoods.
In today’s testimony, Terri noted “This new tax incentive has immense potential to transform communities, grow small businesses, and better residents’ lives – provided that investments are aligned with local priorities and needs” Alignment with local priorities and needs is the key ingredient.
As a national organization, Enterprise has been working with governors, mayors, community-based organizations and investors across the country, and we have heard their excitement and concerns. Terri shared some of that feedback with the committee:
“While communities are excited about this catalyst for economic development, they are also concerned that private investment could unintentionally displace the very residents and businesses that the tax benefit is intended to support.”
Enterprise offered Congress two vital recommendations today:
- Promote the transparency of Opportunity Fund activities, and
- Ensure accountability and prevent abuse.
Terri strongly encouraged Treasury to follow Congress’s guidance and collect transaction-level data from Opportunity Funds so that the public and Congress can evaluate the efficacy of the Opportunity Zones tax incentive. Her testimony further stressed the importance of federal guidelines to explicitly prevent Opportunity Fund investments that would disproportionately harm low-income residents and local businesses.
Terri’s testimony comes at a critical juncture in the rollout of Opportunity Zones: Now that all governors have submitted their nominations, state and local governments have shifted their focus to the possibility of new capital investments and the impact they might have. How they prepare for an infusion of new dollars through Opportunity Funds will be crucial to fostering inclusive and equitable growth.
What’s Next for State and Local Governments
During the hearing, members of the JEC had many questions next steps for states. Their interest in the role of the governors and mayors in their states underscores the importance of state and local governments. As Terri pointed out in her testimony, “there is an important role for federal, state, and local government to play in the implementation of this tax incentive. This will ensure that investments advance local policy priorities and offer sustained benefit to all members of the community, not just a few.”
That’s why Enterprise hosted a two-hour webinar on May 30: State and Local Policies to Prevent Displacement and Attract Investment. “Community benefit” differs from community to community, and it’s important that each has access to the tools, policies, and strategies needed to prepare for a possible influx of new capital. That’s why we will be discussing both anti-displacement policies that can help existing residents and businesses benefit from, and participate in, the growth and economic development that occurs in a community - particularly for communities at risk of gentrification - as well as the creative use of incentives and policies at the state and local level that can attract investments to specific communities or projects. There is a tremendous role for governors and mayors to play to ensure the successful and intentional deployment of Opportunity Funds.
As Enterprise continues to play a central role in the implementation of Opportunity Zones, our next step is to work with state and local governments to foster inclusive economic growth that results in a direct and sustained community benefit to those we seek to serve.
Watch the Full Testimony
Opportunity Zones: Terri Ludwig's Testimony
Enterprise Community Partners CEO Terri Ludwig testified before Congress on Thursday about transparency and accountability in Opportunity Zones investments. Appearing before the Joint Economic Committee, Terri’s message was clear: with the right regulations and guardrails in place, Opportunity Zones have the potential to bring catalytic change to some of the nation’s most distressed neighborhoods. Watch the testimony here, or read more on our blog: http://bit.ly/2s0FnHXPosted by Enterprise Community Partners on Monday, May 21, 2018