Panel
Opportunity Zones 2.0 and Next Generation Public-Private Partnerships | Finance Forum 2025
Milken InstituteRachel Reilly, Simone Joy Friedman, Michael Novogradac, Toby Rittner, Ja'ron Smith, Simone Friedman, Mike Novogratik
- Over $100 billion in equity has been directed into approximately 8,800 designated low-income opportunity zones, funding roughly 600,000 rental housing units based on extrapolations of current data.
- The existing opportunity zone incentive for new capital gains investments is set to expire at the end of next year, with hopes for renewal to allow continued investment through that period and potential redesignation in 2027.
- A potential $2 billion allocation is being discussed to provide technical assistance to small communities, contingent on the enactment of extension legislation.
- Reporting requirements face uncertainty regarding their survival in partisan reconciliation legislation, potentially necessitating a subsequent bipartisan bill to preserve transparency and allow investors and communities to assess project impact.
- If an Opportunity Zones 2.0 framework is established, the administration is expected to issue an executive order prioritizing funding, while major cities may develop strategies to compete for financing as local incentives become more visible.
- The formation of the Opportunity Zone Workforce Institute is anticipated to emerge from a program extension, aiming to leverage philanthropic capital and encourage new investors to replicate workforce training models.
- Proposed reforms may enable the layering of multiple tools, including the Long-Term Link Tax Credit, New Markets Tax Credits, historic tax credits, and renewable energy incentives.
- Despite rising interest rate costs affecting pro formas, developers are expected to mitigate expenses by utilizing additional opportunity zone equity to replace leverage on projects.
- Local tax abatements are increasingly serving as a motivator for developers to restrict rents on housing developments.
- A bipartisan legislative approach is considered necessary to ensure the policy remains a leveraged tool and avoids becoming overly politicized in the future.