The Opportunity Zone program is the nation’s latest public policy attempt to encourage private investment in America’s economically distressed areas. Opportunity Zones are already attracting enormous interest in both the Wall Street and social impact investing communities. Yet the law that established them lacks key safeguards to ensure that investments will go where they are most needed, make economic sense for and meet the needs of local communities, and be effectively monitored and evaluated. As a result, Opportunity Zones won’t automatically create the kind of development that will benefit the residents of the distressed communities in which they are located.
In his policy brief What It Will Take for Opportunity Zones to Create Real Opportunity in America’s Economically Distressed Areas, ICIC Senior Vice President and Director of Research Howard Wial argues that Opportunity Zones will benefit distressed communities only if investors, local governments, community organizations, and other organizations with a stake in the economic progress of low-income communities abide by four fundamental principles to guide investments in the zones.