By Alex Ferrer
Opportunity Zones are a massive tax incentive program for investors with capital gains to put their money into projects in designated low income communities. As we talk about in our report Displacement Zones, the Opportunity Zones tax breaks create a predatory relationship where outside investors receive huge giveaways to engage in extractive projects with no protections ensuring community benefit, driving the displacement of community members.
Just before the COVID-19 shutdowns, the National Council of State Housing Agencies calculated that Opportunity Zones funds held over $47 billion dollars in anticipated investment, almost all of which is for real estate. Thanks to generous extensions the IRS has given to Opportunity Zone investors, that money is mostly unused so far. In a previous post we discussed how after the 2008 crisis, corporate landlords swooped in and bought up thousands of foreclosed properties. Today, with another crisis in the making as more than half of formerly working Angelenos have no employment, $47 billion dollars is a ton of money hanging over the market waiting for an opportunity to buy up any properties that are foreclosed on or that owners are forced to sell.
Opportunity Zones were used as a “disaster recovery” tool once before, when all of Puerto Rico was designated post Hurricane Maria. Recuperación Justa a local grassroots coalition has uncovered exactly how badly that is working for the people of Puerto Rico. Now Trump has asked Tim Scott, the Republican author of the Opportunity Zones legislation to help direct COVID-19 recovery efforts in low income communities.
Opportunity Zones were pitched as a tool for community development, but in reality they have enabled the displacement of communities, to the benefit of speculators who profit off of gentrification. Now, in the time of COVID-19, they threaten to empower disaster capitalists to make more money from the misery, profiting off of lost homes and the foreclosed rental properties of mom and pops.