Opportunity Zones Nominations: State-Of-Play Following March 21 Deadline
Update April 24: Treasury has approved Opportunity Zones in 20 states and 4 territories (April 9, April 19), and we have updated the Opportunity360 state mapping tool to show newly-designated Opportunity Zones. An additional 22 states and Washington, D.C. have made public their nominations prior to final approval, which is anticipated by mid-May.
The first Opportunity Zones deadline has come and gone. While there is no official count, checking in with our partners in states throughout nation has gotten us to a reasonable estimate as to states’ responses.
We believe that up to 15 states and 3 territories have officially submitted their selections to Treasury (listed below), and the remaining met the deadline by filing for a 30-day extension.
America Samoa | Arizona | California | Colorado | Georgia | Idaho | Kentucky | Michigan | Mississippi | Nebraska | New Jersey | Oklahoma | Puerto Rico | South Carolina | South Dakota | Vermont | Virgin Islands | Wisconsin
The approaches taken by those states which have submitted Opportunity Zone nominations varied greatly as it pertains to both the level of public engagement and the different strategies for allocation amongst competing regions and priorities. The Federal Reserve Bank of St. Louis recently created a mapping tool that leverages new information from the Urban Institute to analyze the degree to which eligible census tracts are likely to receive investment and are at risk of experiencing gentrification. Check it out!
Here’s What Happened in California
Since Opportunity Zones was enacted, Enterprise’s state and local policy experts have been actively engaged with state agencies and coalitions, raising awareness and advancing recommendations for strategic Opportunity Zones nominations.
On the eve of the March 21 deadline, I joined Lisa Hall of Georgetown University’s Beeck Center on Your Call radio to discuss the state-of-play in California; specifically the importance of community engagement throughout the Zone selection process and states' options for attracting capital aligned with local economic and social priorities.
Governor Brown had the authority to nominate up to 879 of the 3,516 eligible census tracts, potentially impacting more than 3 million people living in those tracts. On March 2, GO-BIZ and the Department of Finance put forth a set of 798 tracts for public comment. This preliminary recommendation was made using the following criteria:
- Proportional distribution – each county was allocated two Opportunity Zones
- The “poorest areas” with business activity – quantitative measures were applied to select census tracts with the highest level of poverty, and purely residential tracts were screened out by ensuring that a minimum of 30 business establishments were present in the tract.
The public had less than two weeks to react and submit comments to the Department of Finance. However, during this period, 2,684 comments were received from individuals, cities, counties, legislators, and organizations regarding 1,518 individual census tracts, including from groups like CA FWD, The Greenlining Institute, and California Reinvestment Coalition. Many, including Enterprise, continued to request that California opt for a 30-day extension on their submission to Treasury in order to allow for further public engagement and assessment of Zone selection.
Applying Recommendations and Submitting Final Nominations to Treasury
On March 21, California submitted to Treasury 879 tracts in 57 of the state’s 58 counties, responding to public comment in the following ways:
- A total of 183 tracts were removed due to substantiated critiques; alternative and additional recommendations were accepted when feasible to maximize allowable number of census tracts nominated. Guidance provided by local cities and counties was prioritized.
- Cap median income of a census tract below $100,000, which effectively eliminated a number of university campuses that were initially selected due to low student income.
- Nearly all nominated census tracts are eligible to receive state-level funding that could further investments made through Opportunity Funds - 96 percent overlap with AB 1550 designations and 64 percent have SB 535 designations.
Treasury has until April 20 to approve California’s Zone nominations, and guidance on establishing Opportunity Funds may be released around this same time. We are already beginning to see the introduction of state-level legislation aligned with Opportunity Zones – AB 3030 was recently proposed to exempt certain projects from the California Environmental Quality Act.
Looking for More Information?
Join us for a free webinar on Analyzing Opportunity Zone Nominations and What States Should Do Next on April 25 from 1-2 p.m. ET as we analyze the results of Zone nominations in select states and discuss ideas for local policies and programs that could maximize the benefit of investments incented through Opportunity Zones.
Visit Enterprise’s Opportunity Zones page – www.OpportunityZonesInfo.org – which was just updated with new information and resources, including webinars from Transform Finance and the Council of Development Finance Agencies as well as guiding principles for Opportunity Zones from Georgetown University’s Beeck Center.