Stakeholders Consider the Potential of Opportunity Zones, Urge Transparency of Investments

With a first round of proposed rules for the new Opportunity Zones tax benefit now publicly available, potential investors, fund managers, community groups and other stakeholders are examining the potential benefits and challenges of this new investment tool. An article in The New York Times notes that Opportunity Zones could do a lot of good for people living in the zones and earn investors’ money, or simply enrich investors. Rob Lalka, cofounder and partner at Medora Ventures and Professor at Tulane’s A.B. Freeman School of Business, and Scott Shalett, managing partner and head of public affairs at Medora Ventures, write in The Hill that the private sector and communities must lead on impact reporting in the absence of the government requiring reports on metrics like job creation and poverty reduction. Lalka and Shalett write that “embedding an impact focus and seeking community input at the outset is far easier and more effective early on, rather than attempting to retroactively measure such non-monetary results or rebuild trust with communities after investments have been made.” The industry encourages the submission of comments on the initial set of regulations to the IRS by the December 28 deadline to identify ways to improve the regulations and prevent abuse of this economic development tool.

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