Place-Based Tax Incentives for Community Development

Place-Based Tax Incentives for Community Development

Highlights

• Many communities nationwide suffer from disinvestment and under-investment, resulting in high rates of poverty and unemployment.
• State and federal place-based tax incentives such as Enterprise and Empowerment Zones and New Markets Tax Credits have previously attempted to attract capital investment to economically distressed areas.
• A new federal place-based tax incentive, Opportunity Zones, builds on past experience and research and aims to boost economic development in designated census tracts.

Although national measures of economic health indicate that the United States has largely recovered from the Great Recession, the country still exhibits considerable geographic variation in economic vitality. Many areas — rural, urban, and suburban — continue to show signs of economic distress, such as high poverty and unemployment rates. For example, in the lowest-performing quintile of counties in the United States, the unemployment rate is 10.7 percent compared with 5.8 percent in the top quintile, and the median household income is less than half that of the top quintile.1 Such disparities significantly impact the lives of these residents. Living in economically distressed areas is associated with negative health, education, and other outcomes.2

Several different dynamics contribute to these persistent economic disparities, including disinvestment and underinvestment. For various reasons, investors have not found these markets to be attractive. In response, the federal government has implemented policies and grants, such as the Community Reinvestment Act and HUD’s Community Development Block Grant (CDBG) program, to direct more capital into distressed areas and benefit low-income residents. Place-based tax incentives represent an additional policy approach designed to increase the flow of investment capital to distressed areas. The literature evaluating tax incentives offers important context for the design and lessons that can inform the implementation of Opportunity Zones, a new tax incentive aimed at helping low-income communities.

Past and Current Federal Place-Based Tax Incentives

Unlike people-based policies that provide aid or opportunities to low-income households or individuals wherever they live and work, place-based strategies provide aid to designated geographic areas that are economically distressed to improve conditions and increase available opportunities for low-income residents.3

Governors designated Opportunity Zones in their states with strategic considerations. In Maryland, for example, selections aim to leverage proximity to anchor institutions to attract investment. Photo courtesy of Baltimore Development Corporation

Empowerment Zones, Enterprise Communities, and Renewal Communities. In the 1980s, many state governments began implementing “enterprise zones” — designated low-income communities eligible for tax credits for hiring local residents, tax abatement, and other credits for economic activity to encourage economic growth.4 Evidence supporting the efficacy of these programs is mixed, with most studies finding modest or no effects on employment and some finding positive effects on housing prices.5 Building on these state programs, the federal Omnibus Budget Reconciliation Act of 1993 introduced a series of place-based policies that would eventually include Empowerment Zones (EZs), Enterprise Communities (ECs), and Renewal Communities (RCs). The initial legislation established EZs and ECs, and Congress authorized an additional round of EZs and ECs in 1997 and 1999, respectively. Congress authorized a third round of EZs and established the first RCs in 2000. The EZ and EC programs awarded grants and tax incentives to promote development in economically distressed communities. State and local governments nominated communities in census tracts with high poverty and unemployment rates, and those communities then developed and submitted strategic plans. In the first round, 6 urban areas (with 2 areas added later) and 3 rural areas became EZs, and another 65 urban areas and 30 rural areas became ECs. Each Round I urban EZ received $100 million in block grants, and the rural EZs received $40 million each. Businesses located in the EZs received tax credits for wages paid to employees who lived and worked in the area; tax credits for new hires from groups with high unemployment rates, such as youth ages 18 to 24, who live in the area; an increased expensing deduction for depreciable property; and tax-exempt bonds for loans to qualified businesses for financing eligible property.6 Congress later added incentives related to capital gains exclusions. Round I ECs received much smaller grants of $2.95 million each and were eligible for tax-exempt bond financing.7 Round I and II EZs and Round III rural EZs and ECs also received grant funding, whereas Round III urban EZs and the RC program were eligible only for tax incentives.8

By 2006, Round I EZs and ECs had expended 85 percent of the $1 billion allocated for grants, but insufficient data existed to determine how much additional funding had been leveraged.9 Administrators of the urban EZs reported $643 million in facility bonds associated with 40 projects. From 2002 through 2008, RC administrators reported more than $1.7 billion in commercial revitalization deductions, approximately half of the total that could have been allocated. Although the Internal Revenue Service (IRS) could not break down use of employment credits by area, in aggregate, EZs and RCs filed for $675 million in credits on Form 1040 returns for years 1997 through 2008 and $2.6 billion in credits on Form 1120 (for corporate filers) for the same period.10

Opportunity Zones are designed to attract long-term investment in communities that have historically suffered from disinvestment.

Low-Income Housing Tax Credits. Low-income housing tax credits (LIHTCs) were created through the Tax Reform Act of 1986. The LIHTC program awards two types of credits to help finance affordable housing development: 9 percent (awarded competitively and usually reserved for new construction) and 4 percent (awarded noncompetitively and usually used for rehabilitation projects and new construction financed with tax-exempt bonds). The 9 percent credits subsidize 70 percent of a project’s qualified costs, and the 4 percent credits subsidize 30 percent.11 Although the LIHTC program generally is not a place-based policy, the program includes place-based incentives through which enhanced LIHTCs are available for Difficult Development Areas and Qualified Census Tracts. In those areas, recipients can claim credits for 130 percent of the project cost rather than the usual 100 percent of costs.12 Qualified projects must pass either the 20-50 test or the 40-60 test. For the first test, at least 20 percent of units must be rent restricted and occupied by households earning incomes at or below 50 percent of the area median income (AMI); in the second, at least 40 percent of units must be rent restricted and occupied by households earning incomes at or below 60 percent of AMI. Since 2018, a third test, the income averaging rule, has been in effect; this test allows a single project to have units at various income levels (defined at 10 percent increments) up to 80 percent of AMI provided that the overall affordability of the project averages to 60 percent of AMI.13 Projects are required to meet investment regulations for 15 years and affordable rent requirements for 30 years.14

LIHTCs are awarded through state governments. States receive an allotment of LIHTCs based on their population; in 2019, this allotment was set at $2.76 per person with a minimum state allocation of $3,166,875 (the Consolidated Appropriations Act of 2018 increased allotments by 12.5 percent through 2021). State housing finance agencies allocate credits to rental project developers according to federally required but state-created Qualified Allocation Plans (QAPs). Although federal law mandates only that states prioritize projects that target the lowest-income households and have the longest period of affordability, states can use their QAPs to pursue various housing-related policy goals, such as encouraging the development of housing with supportive services or housing for veterans. Awardees either can claim the credit themselves or, more commonly, sell the credits to a corporate investor. The investor claims the majority share of equity but remains a passive actor, allowing the developer to retain control over decisionmaking.15

Through 2014, LIHTCs have financed the development and preservation of more than 2.1 million units in more than 28,000 projects. In 2016, the cost to the government in foregone tax revenue was $7.9 billion. Nearly half of LIHTC households are considered extremely low–income (earning less than 30% of AMI), and another one-third are considered very low–income (earning between 30% and 50% of AMI). The median annual income of a household in a LIHTC-assisted unit is $17,470; approximately 58 percent of households in LIHTC-assisted units make less than $20,000 per year. Despite the program’s limitations on rents, 37 percent of households in LIHTC units are rent burdened.16 According to a study by the University of California–Berkeley’s Terner Center for Housing Innovation, however, many of these rent-burdened tenants nevertheless value living in a LIHTC unit because of the stability and quality of the housing.17 In recent years, LIHTC has helped finance approximately one-third of all new multifamily housing developments.18

Opportunity Zone investments could potentially be combined with LIHTC investments to fund affordable housing. U.S. Department of Housing and Urban Development

New Markets Tax Credits. The New Markets Tax Credit (NMTC) program, first authorized by the Community Renewal Tax Relief Act of 2000, awards individuals or institutions federal income tax credits for investing equity in Community Development Entities (CDEs). Investors receive a cumulative reduction in their federal income taxes equivalent to 39 percent of the total Qualified Equity Investment amount applied over a seven-year period. The program is administered and regulated by the IRS, and the Community Development Financial Institutions (CDFI) Fund certifies credit-receiving entities and makes the allocations. As with the LIHTC program, these credits are awarded competitively. CDEs function as a financial intermediary, aggregating funds to invest in projects proposed by Qualified Active Low-Income Community Businesses (QALICBs). QALICBs are similarly certified by their presence in low-income communities. Although qualifying projects must occur in “distressed” census tracts, the CDFI Fund’s evaluation criteria for CDEs prioritize “very distressed” census tracts, similar to the way state LIHTC allocating authorities can target LIHTC investments through the scoring criteria in the QAP.

NMTCs have supported the development of affordable housing. Program rules permit financing NMTC projects consisting entirely of residential units for sale; if the units are for lease, rent revenue can represent no more than 80 percent of project revenues, which effectively requires such projects to be mixed use. In the case of for-sale housing, allocatees must sell at least 20 percent of their units to buyers with a debt-to-income ratio of 38 percent or less, and these units must be owner-occupied by households earning incomes at or below 80 percent of AMI.19 With rental housing, for the duration of the seven-year NMTC compliance period, at least 20 percent of an allocatee’s units must have rents that do not exceed 30 percent of the adjusted family income at 80 percent of AMI, and they must be occupied by households earning incomes at or below 80 percent of AMI. Although housing projects make up only 5 percent of all NMTC projects, these projects account for 37 percent of total project dollars because many of the largest NMTC projects involved housing.20

For-profit nonfinancial institutions were awarded the highest share of NMTCs until 2006; about 60 percent of recipient QALICBs were for-profit institutions, almost 40 percent were nonprofits, and about 2 percent were government or tribal entities. Between 2002 and 2010, the CDFI Fund issued 664 awards to 350 CDEs, allocating $12.9 billion in tax credits over 9 allocation rounds. Between 2003 and 2015, the NMTC Coalition reported $42 billion in NMTCs, generating more than a million jobs, with more than 72 percent of these investments occurring in severely distressed communities.21 An estimated 30 to 40 percent of projects probably would not have proceeded without NMTCs; approximately 10 percent probably would have proceeded without NMTCs but at a different location or on a delayed schedule. Roughly 20 percent of projects did not demonstrate conclusive evidence of needing NMTCs to proceed, and the evidence was inconclusive for 30 percent of projects.22

Efficacy of Place-Based Tax Incentives

From left to right, Denise Cleveland-Leggett, Region IV Regional Administrator; Scott Turner, executive director of the White House Opportunity and Revitalization Council; Secretary Ben Carson; and officials from Birmingham, Alabama, participated in a roundtable discussion on Opportunity Zones. U.S. Department of Housing and Urban Development

Past place-based tax incentives were designed to foster broad economic development, including job creation, increased incomes, and real estate development. Researchers have attempted to evaluate how successfully these programs have achieved these outcomes. Overall, the research suggests that the incentives have produced mixed results in each outcome area. In addition, methodological concerns, such as insufficient data and difficulty establishing appropriate comparisons, have made evaluations difficult.

Employment. A few studies tied EZs and ECs to increased employment. The 2001 HUD Interim Report on EZs found that total employment grew in five of the original six EZs between 1995 and 2000, and Busso et al. also found that EZs had positive impacts on wage increases and employment.23 Ham et al. found positive, statistically significant impacts on unemployment rates from EZs (a decrease of 8.7 percent) and ECs (a decrease of about 2.6 percentage points), but this study has been criticized for its selection of comparison areas, which exaggerates the impact of these programs.24 Overall, however, research on EZs’ impact on employment has demonstrated mixed results, with other studies, such as Hanson (2009), finding (depending on the methods used) a positive effect on the employment rate of 2 percentage points or no effect and Hanson and Rohlin (2013) finding that EZs simply reallocate economic activity into the zones from other economically similar areas.25 NMTCs have also been associated with job growth. The Urban Institute’s evaluation of NMTCs found that in 60 percent of NMTC project areas, employment levels increased by 33 percent or more compared with levels before the projects.26

Poverty and income. As with employment, Ham et al. and Busso et al. found that EZs had a positive impact on poverty and income. For EZs and ECs, Ham et al. found decreases of 8.8 percentage points and 20 percentage points, respectively, in the poverty rate, and increases of 20.6 percent and 12.7 percent, respectively, in average income. Busso et al. also found positive impacts on wages of 8 to 13 percent for zone residents employed within the zone and 3 to 5 percent for zone residents generally, without increases in rents. On this measure, Hanson found (depending on the methods used) a positive effect on the poverty rate of 2 percentage points or a negative effect of 2 percentage points.27 The U.S. Government Accountability Office (GAO) found that poverty rates declined in most Round I EZs and ECs but that those changes might be attributable to other factors, and Reynolds and Rohlin (2014) found no effect of EZs on impoverished residents.28 For the LIHTC program overall (not the QCTs specifically), Diamond and McQuade (2016) found evidence that LIHTCs reduce poverty rates in high-poverty neighborhoods.29

Although the areas designated as Opportunity Zones have suffered from underinvestment, they have many assets that will be attractive to investors. Art Wager / iStock.com

Other neighborhood impacts. Evaluations of place-based policies have also found evidence of broader neighborhood impacts. For example, LIHTC projects can have a modest positive impact on increasing neighboring property values and reducing crime rates in distressed neighborhoods and small negative effects on property values (and no impacts on crime) in higher-opportunity neighborhoods. Freedman cautioned, however, that residents of neighboring areas may experience reduced employment and business investment as companies relocate operations to qualified areas.30

Limitations of the evidence. The divergent findings on place-based tax incentives reflect several methodological and data challenges. As GAO noted, establishing a causal relationship between specific development projects and economic growth in a community is difficult.31 An EZ community may be benefiting from additional economic development grants, incentives, and policies, making it difficult to isolate the impact of the various programs.32 For example, investors also claimed Community Reinvestment Act credits in 76 percent of NMTC projects between 2002 and 2006.33 In a similar way, NMTCs can be used in conjunction with historic preservation tax credits.34 GAO reported that insufficient data on the use of program tax benefits limited researchers’ ability to evaluate EZs, ECs, and RCs effectively.35 The nonrandom selection of zones makes researchers’ choice of control areas important but also difficult. Evidence of new jobs within the zone, for example, could simply represent the movement of jobs from one area to another.36 Limitations on systemic data have also complicated assessments of LIHTC impacts, as has the wide latitude states have in designing the QAPs, which complicates comparisons. Despite these limitations on the evidence base, research on previous place-based tax incentives and experience have informed the design of the new place-based tax incentive, Opportunity Zones (OZs), and can offer lessons for its implementation.

A New Opportunity: Opportunity Zones

Enacted as part of the 2017 Tax Cuts and Jobs Act, OZs aim to direct some of the estimated $6.1 trillion in unrealized capital gains into qualified low-income and contiguous census tracts.37 The Opportunity Zones initiative offers different levels of tax benefits on unrealized capital gains that are reinvested in OZs. Investors can defer taxes on capital gains invested in an OZ until December 31, 2026, or when they dispose of the investment (whichever comes first); reduce their tax liability by 10 percent if they hold the investment for 5 years or by 15 percent if they hold it for 7 years; and exclude from taxation capital gains earned on the appreciation of an OZ investment held for 10 years or longer.38 Governors and executives of the 50 states, 5 territories, and the District of Columbia nominated OZs in their jurisdictions; from these, the U.S. Department of the Treasury designated 8,764 OZs. Eligible zones had to consist of census tracts with an individual poverty rate of at least 20 percent or a median family income that was less than 80 percent of AMI. Up to 5 percent of the OZ tracts could be contiguous census tracts as long as their median family income did not exceed 125 percent of AMI.39 An Urban Institute analysis of the designated zones showed that the chosen zones have a median household income of $33,345 (compared with $44,446 for eligible nondesignated tracts and $58,810 for all tracts), a poverty rate of 31.75 percent (compared with 21.12% for eligible nondesignated tracts and 16.61% for all tracts), and an unemployment rate of 13.14 percent (compared with 9.26% for eligible nondesignated tracts and 8.12% for all tracts).40 All OZ investment must flow through an Opportunity Fund, an investment vehicle that pools private capital to invest, with a minimum of 90 percent of assets being held in qualified OZ property.41

The development of OZs was informed by past experiences with EZs, ECs, and NMTCs, with which they share certain features. Like these previous incentives, OZs offer preferential tax treatment for investments in low-income neighborhoods. They share the goal of broad-based economic development, aiming to increase employment and income as well as increasing investment in real property. OZs, however, also have some crucial differences from past place-based tax incentives. The OZ incentive has no cap, and Opportunity Funds can “self-certify,” eliminating some of the regulatory burden and obligations of the older programs.42 Unlike EZs, OZs do not combine tax benefits with grants, although localities may target other grants, such as CDBG and CDBG-Disaster Recovery, in OZs. Some of these differences reflect insights derived from experience. The architects of OZs believed that the EZ and EC employment incentives, for example, were too small or inefficient to effectively increase employment. They also argued that the programs and their regulations were too complex, contributing to underutilization. The regulatory flexibility incorporated into OZs reduces the barriers that OZs’ architects felt impeded broader participation in EZs, and the absence of a cap removes an additional barrier that restricts greater investment in NMTCs.43

Lessons from previous place-based tax incentives can also shape the implementation of OZs. One such lesson is the critical importance of local governance in determining outcomes. In their analysis of the original urban EZs, Rich and Stoker find that “the quality of local governance,” including the capacity and capability of local agencies and organizations in marketing, collaboration, and policymaking, “distinguished the performance of the revitalization initiatives….”44 They found that the city of Baltimore had greater success with EZs than some of its peers due to the quality of its collaborative, capacity-building implementation. One of the six Round I urban EZs, the city established the Empower Baltimore Management Corporation (EBMC) to coordinate EZ implementation. EBMC helped facilitate approximately $1.2 billion in public and private investment in the Baltimore EZ from 1995 to 2000, creating an estimated 5,700 new jobs, placing 11,000 residents in jobs, reducing crime by 60 percent, and increasing homeownership by 6 percent. EBMC credited these successes to strategic partnerships with employers, strong marketing of EZ incentives to businesses, and collaboration with other state and city economic development agencies.45 Localities that emphasize collaborative partnerships and capacity in their OZs may also be more successful at achieving their goals. University of California–Irvine professor David Neumark suggested that policymakers should target place-based tax incentives to ensure that the initiative’s benefits go to residents of the designated zones rather than people relocating to the zone and that existing residents are not displaced.46

State and city governments, such as Louisville, Kentucky, have been proactive in marketing the investment potential of their Opportunity Zones. Photo courtesy of the Louisville Urban League

Because OZs are a new tax incentive whose regulations are still being finalized, investors’ response to them is largely undetermined. Examining how previous tax incentives have been used, however, may offer some clues about how OZs will be received. Slightly less than two-thirds of NMTC projects relate to real estate or construction projects, which may portend the types of investments that result from OZs. NMTC investment has been geographically concentrated in distressed areas, which may be similar to the patterns that OZ investments take, although Lester argued that OZs’ lack of Opportunity Fund certification by a government entity may encourage a different distribution of investments.47

OZs, like EZs and NMTCs, will intersect with other housing and development policies. Michael Novogradac, managing partner at Novogradac, said that LIHTC projects will attract investment from OZ funds under the right circumstances. Although banks, which are the primary investors in LIHTCs, do not frequently have capital gains to invest, said Novogradac, when they do — for example, after the sale of a subsidiary — they may invest in LIHTCs in OZs.48 From an affordable housing standpoint, said Kathie Soroka of Nixon Peabody, “the greatest promise of Opportunity Zones is to bring in another kind of funding to low-income housing investment that can increase competition and pricing in LIHTCs and provide an alternative to LIHTC funding for affordable housing.” She noted that some of these potential investors, such as family offices (in-house managers of the investments of wealthy families), initially might need help navigating these markets, which could come from syndicators in the well-established LIHTC investment infrastructure.49

Both federal and state governments can take steps to encourage OZ investment in LIHTC projects. HUD has launched a Federal Housing Administration pilot program to encourage investment in OZs by accelerating the financing of LIHTC projects. Novogradac noted that LIHTCs, particularly 4 percent LIHTCs, combined with OZ incentives could work well with HUD’s Rental Assistance Demonstration conversions of public housing.50 State housing finance agencies that award LIHTCs can also encourage OZ investment. For example, the state of Mississippi is committing 12.5 percent of its LIHTC allocations from 2018 to 2021 to award credits to projects in OZs beginning in the 2019 cycle.51 Policymakers can align various state incentives and allocations with OZ projects without displacing investments associated with other policies such as the Community Reinvestment Act.

Some critics are concerned that investments in OZs will fuel gentrification and drive up rents and other costs that threaten to displace the very low-income residents that the incentives are designed to help. Local governments and other stakeholders can take several steps to mitigate these potential impacts. First, said Kenan Fikri of the Economic Innovation Group, localities should ensure that their affordable housing toolbox is well stocked before investment begins. Regardless of whether the OZ investment itself is intended to support affordable housing, localities need to be sure that they have a policy framework in place to preserve existing affordable housing and encourage the production of additional affordable options to prevent current residents from being priced out.52 State and local governments can provide tax abatement for low-income residents so that rising property values and tax assessments do not force them from their homes. Local governments can also reform their zoning and permitting processes to remove barriers to affordable housing construction. (For more on reducing regulatory barriers, see the Spring 2018 issue of Evidence Matters.) Fikri also suggested that local actors play a proactive role in advocating for the kinds of development that the community wants and will benefit from, which may include affordable housing.53

Some early signals suggest that at least some funds will voluntarily adopt guidelines to commit to community engagement and will approach OZ investing as impact investing, seeking social good from their capital, said Fikri.54 The U.S. Impact Investing Alliance and the Beeck Center, for example, have been convening investors and local leaders to develop a framework for measuring needs and outcomes and for conducting community engagement to ensure that OZs have a positive impact on communities.55 Fikri also expected that “local capital is going to move first” — if philanthropies and other local entities, together with locally committed investors, support projects that a community wants and needs, that support may attract additional capital from Opportunity Funds farther afield.56

Making the Most of Opportunity Zones

OZs have the potential for widespread positive economic impacts by incentivizing capital investment in communities experiencing disinvestment and underinvestment. To ensure that these incentives benefit the low-income residents who live and work in OZs, HUD has issued a formal Request for Information for input on how it can optimize its policies and support to maximize their impact. HUD notes that 38 percent of public housing units are located within OZs.57 Two of the possibilities HUD is considering are prioritizing grants and other assistance for distressed areas and creating an information portal. HUD also requested more open-ended input on how the department should evaluate the impact of OZs and “how HUD can ensure existing residents, businesses, and community organizations in Opportunity Zones benefit from the influx of investment.”58 HUD support, along with strong, collaborative local partnerships, can make the most of this new opportunity to promote investment and development in low-income communities.

1. Ryan Nunn, Jana Parsons, and Jay Shambaugh. 2018. “The Geography of Prosperity,” in Place-Based Policies for Shared Economic Growth, Jay Shambaugh and Ryan Nunn eds.; The Hamilton Project, Brookings, 12.
2. Ibid.
3. George Galster. 2017. “People Versus Place, People and Place, or More? New Directions for Housing Policy,” Housing Policy Debate 27:2, 261–5.
4. Gerry Riposa. 1996. “From Enterprise Zones to Empowerment Zones: The Community Context of Urban Economic Development,” American Behavioral Scientist 39:5, 542–3.
5. David Neumark and Helen Simpson. 2015. “Place-Based Policies,” in Handbook of Regional and Urban Economics, Volume 5B, Gilles Duranton, J. Vernon Henderson, and William C. Strange, eds. Oxford: Elsevier, 1230.
6. U.S. Government Accountability Office. 2006. “Empowerment Zone and Enterprise Community Program: Improvements Occurred in Communities, but the Effect of the Program Is Unclear,” 7–8; Michael J. Rich and Robert P. Stoker. 2014. Collaborative Governance for Urban Revitalization: Lessons from Empowerment Zones, Ithaca: Cornell University Press, 33.
7. U.S. Government Accountability Office.
8. U.S. Government Accountability Office. 2010. “Information on Empowerment Zone, Enterprise Community, and Renewal Community Programs.”
9. Ibid., 11.
10. Ibid., 24–5.
11. Congressional Research Service. 2019. “An Introduction to the Low-Income Housing Tax Credit,” 1.
12. Ibid., 2–3.
13. Mark Shelburne and Thomas Stagg. 2018. “Implementation of LIHTC Income Averaging,” Novogradac Affordable Housing Resource Center.
14. Corianne Payton Scally, Amanda Gold, and Nicole DuBois. 2018. “The Low-Income Housing Tax Credit: How It Works and Who It Serves,” Urban Institute, 2.
15. Congressional Research Service, 2–3.
16. Scally et al., 2.
17. Carolina K. Reid. 2018. “The Links Between Affordable Housing and Economic Mobility: The Experiences of Residents Living in Low-Income Housing Tax Credit Properties,” Terner Center.
18. Jill Khadduri, Carissa Climaco, Kimberly Burnett, Laurie Gould, and Louise Elving. 2012. “What Happens to Low-Income Housing Tax Credit Properties at Year 15 and Beyond?” Prepared for U.S. Department of Housing and Urban Development, xi.
19. CDFI Fund. 2019. “NMTC Compliance & Monitoring FAQs,” 15–6.
20. Martin D. Abravanel, Nancy M. Pindus, Brett Theodos, Kassie Bertumen, Rachel Brash, and Zach McDade. 2013. “New Markets Tax Credit (NMTC) Program Evaluation: Final Report,” Urban Institute, 39.
21. New Markets Tax Credit Coalition. 2018. “Fact Sheet: The New Markets Tax Credit (NMTC) Extension Act.”
22. Abravanel et. al, xviii–xix.
23. Scott Hebert, Avis Vidal, Greg Mills, Franklin James, and Debbie Gruenstein. 2001. “Interim Assessment of the Empowerment Zones and Enterprise Communities (EZ/EC) Program: A Progress Report,” prepared for the U.S. Department of Housing and Urban Development; Matias Busso, Jesse Gregory, and Patrick Kline. 2013. “Assessing the Incidence and Efficiency of a Prominent Place Based Policy,” American Economic Review 103, 897–947.
24. John Ham, Charles Swenson, Ayse Imrohoroglu, and Heonjae Song. 2011. “Government Programs Can Improve Local Labor Markets: Evidence from State Enterprise Zones, Federal Empowerment Zones, and Federal Enterprise Communities,” Journal of Public Economics 95, 779–97; David Neumark. 2018. "Rebuilding Communities Job Subsidies," in Place-Based Policies for Shared Economic Growth, Shambaugh, Jay and Ryan Nunn, eds., 87.
25. Andrew Hanson. 2009. “Local Employment, Poverty, and Property Value Effects of Geographically-Targeted Tax Incentives: An Instrumental Variables Approach,” Regional Science and Urban Economics 39, 721–31; Andrew Hanson and Shawn Rohlin. 2011. “The Effect of Location-Based Tax Incentives on Establishment Location and Employment across Industry Sectors,” Public Finance Review 39:2, 195–225.
26. Abravanel et. al., xviii–xix.
27. Hanson 2009.
28. U.S. Government Accountability Office 2006; C. Lockwood Reynolds, and Shawn Rohlin. 2013. “The Effects of Location-Based Tax Policies on the Distribution of Household Income: Evidence from the Federal Empowerment Zone Program,” Unpublished manuscript, Kent State University.
29. Rebecca Diamond, and Tim McQuade. 2017. “Who Wants Affordable Housing in their Backyard? An Equilibrium Analysis of Low Income Property Development,” Stanford GSB.
30. Matthew Freedman. 2013. “Targeted Business Incentives and Local Labor Markets,” Journal of Human Resources 48, 311–44.
31. U.S. Government Accountability Office 2010, 27.
32. Rebecca Lester, Cody Evans, and Hanna Tian. 2018. “Opportunity Zones: An Analysis of the Policy's Implications,” State Tax Notes 90, 226.
33. Abravanel et. al., x.
34. Ibid., 73.
35. U.S. Government Accountability Office 2010, 7, 10–1.
36. Neumark 2018, 85.
37. Economic Innovation Group. 2018. “Opportunity Zones: Tapping into a $6 Trillion Market.”
38. Lester et. al., 224.
39. Ibid., 222.
40. Brett Theodos, Brady Meixell, and Carl Hedman. 2018. “Did States Maximize Their Opportunity Zone Selections?” Urban Institute, 8. Statistics cited indicate an average or average percentage based on Community Development Financial Institution Fund and Urban Institute analysis of 2012-16 U.S. Census Bureau American Community Survey.
41. Lester et. al., 224.
42. Ibid., 227.
43. Jared Bernstein and Kevin A. Hassett. 2015. “Unlocking Private Capital to Facilitate Economic Growth in Distressed Areas,” Economic Innovation Group.
44. Rich and Stoker, 226–7.
45. U.S. Department of Housing and Urban Development. 2005. “Capturing Successes in Renewal Communities and Empowerment Zones,” 149–50.
46. Email correspondence with David Neumark, 12 April 2019.
47. Lester et. al., 228.
48. Interview with Michael Novogradac, 28 March 2019.
49. Interview with Kathie Soroka, 2 April 2019.
50. Michael Novogradac. 2018. “Three Ideas to Build on RAD's Success,” Novogradac Journal of Tax Credits IX:V.
51. “Governor Approves Mississippi Home Corporation's Special Opportunity Zone Cycle for Low Income Tax Credit Program,” NCSHA website (www.ncsha.org/hfa-news/governor-approves-mississippi-home-corporations-special-opportunity-zone-cycle-for-low-income-tax-credit-program/). Accessed 8 April 2019.
52. Interview with Kenan Fikri, 25 March 2019.
53. Ibid.
54. Ibid.
55. Lisa Green Hall, Fran Seegull, Chelsea Amelia Cruz, and Adrian Franco. 2018. “Opportunity Zones: Moving Toward a Shared Impact Framework.”
56. Interview with Kenan Fikri.
57. U.S. Department of Housing and Urban Development. 2019. “Review of HUD Policy in Opportunity Zones,” Federal Register 84:74, 16030.
58. U.S. Department of Housing and Urban Development. 2018. “HUD Announces Request for Information on Maximizing the Positive Impact of Opportunity Zones,” 12 April press release.

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