President Donald Trump has signed a federal order that stipulates government agencies must prioritize moving their offices to so-called opportunity zones, which are low-income areas of cities flagged for revitalization.
The order could prompt federal agencies such as the Department of Housing and Urban Development, and the Department of Labor, to relocate their offices to designated census tracts under the federal Opportunity Zones program, The Real Deal reported.
The Opportunity Zones program was created as part of the Tax Cuts and Jobs Act of 2017, and provides big tax break incentives to investors and real estate developers who help invest in and revitalize distressed communities.
There are around 8,700 federally designated Opportunity Zones in the U.S. The program is meant to boost investment in low-income areas, by enabling investors to forgo or defer paying capital gains taxes the longer they invest in those areas. The poverty rate in each zone is at least 20%.
President Trump’s new order asks all federal agencies to stop prioritizing central business districts and city centers and instead consider relocating to a designated opportunity zone. However, the President said that costs and security considerations must still take precedence, and that if an Opportunity Zone is not suitable, agencies should look instead at other developed or undeveloped sites within historic districts.
The Opportunity Zone program has so far encouraged an estimated $75 million worth of private investment in distressed neighborhoods over the last two years, according to a White House Council of Economic Advisers report.
Democratic presidential candidate Joe Biden is also targeting opportunity zones as part of his campaign, saying he will reform the program and require the Treasury Department to ensure the funds are being used for their intended purpose.