New Jersey Future Praises Quick Selection of Opportunity Zones

 

TRENTON, April 10 — New Jersey Future is pleased to see that the selection and approval, announced April 9, of 169 Census Tracts in the state as designated Opportunity Zones was finalized quickly.

“The Opportunity Zone program, co-sponsored by our own Sen. Cory Booker, is an innovative way to direct private capital investment to neighborhoods where incomes may be low, but economic potential is high,” said New Jersey Future Executive Director Peter Kasabach. “We congratulate Sen. Booker for the program, and Gov. Murphy both on the process he used to nominate the state’s zones, and on the final list.” All 169 of the tracts nominated were approved, and represent communities in all 21 of New Jersey’s counties.The full list and an interactive map are available on the state Department of Community Affairs website.

“Our analysis largely suggests that these Opportunity Zone tracts are places where strategic investments can serve as a strong catalyst for future economic growth,” Kasabach continued. “They have the right combination of good location and durable assets on which to build, and they show the potential to provide the return that Opportunity Fund investors will be seeking.”

For its market strength analysis, New Jersey Future used three metrics — change in population, change in median rent, and change in median income between 2011 and 2016 — to compare the 169 Opportunity Zone tracts with all Census tracts in New Jersey. Its analysis showed that in the Opportunity Zone tracts, population, while significantly lower than the statewide median, rose faster overall than they did statewide; median rents rose, but at a slower rate than they did statewide; and median incomes fell compared to the state overall.

New Jersey Future also analyzed these tracts’ proximity to transit, and how they ranked on a series of municipal smart-growth indicators it has developed: whether there is a discernible downtown or town center; how dense and interconnected the street network is; and the density of population and employment. A healthy majority of Opportunity Zone tracts offer access to transit, and either are or have the potential to become more “center”-like. This development pattern has become a promising indicator, since much of the state’s recent growth has been in such areas.

New Jersey Future’s analysis can be found on its website.

The Opportunity Zone program is part of the federal Tax Cuts and Jobs Act, and provides for tax credits for private capital investment in designated areas. States were invited to nominate up to 25 percent of their low-income Census tracts — tracts with a poverty rate of 20 percent or a median family income up to 80 percent of the area median — that also met certain indicators of market potential.

The next step in the process is for the U.S. Treasury, which oversees the Opportunity Zone program, to develop regulations for the establishment of Opportunity Funds, which will be the vehicles for investments in Opportunity Zones.

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