JUE Insight: The Impacts of Opportunity Zones on Zone Residents

Destruction, Policy, and the Evolving Consequences of Washington, DC’s 1968 Civil Disturbance

“…From New Deal programs of the 1930s, to the "Urban Renewal" of the central areas of US cities in the 1950s and 1960s, the federal government has long striven, with at best mixed success, to redevelop urban areas (Collins and Shester, 2013;Cohen, 2019). In recent years, these policies have been replaced by new levers for addressing vacancy and disinvestment: land banks (Whitaker and Fitzpatrick, 2016), tax increment financing (Greenbaum and Landers, 2014), and various tax incentive zones (Neumark and Kolko, 2010;Freedman et al, 2021). Consistent with our findings, none are heralded as a silver bullet.…”

The Impact of Opportunity Zones on Commercial Investment and Economic Activity

“…Our investment data cover the universe of significant commercial investments in the United States, and data from Mastercard enable us to observe any related impacts on new business creation, new business loans, commercial diversity and consumer spending. Across all outcomes, we find that OZ designation has little or no e↵ect on investment and economic activity, suggesting that downstream impacts on OZ resident well-being are not forthcoming, consistent with the results of Freedman et al (2021). Our results therefore suggest that the tax advantages provided represent a straightforward transfer from the government to investors with no robust evidence that the investment that does occur in OZs would not have occurred otherwise.…”

“…Atkins et al (2020) use zip code level data on job postings and salary postings, finding that zip codes with OZs have fewer job postings and higher posted salaries than similar zip codes without OZs, but e↵ects are small in magnitude and not consistently statistically significant. Freedman et al (2021) find no statistically significant impact of OZ selection on employment, wages and poverty rates once controlling for pre-trend di↵erences between selected and eligible but not selected tracts.…”

Cherry‐picking industrial properties in opportunity zones

“…Our study relates to several contemporaneous studies that also explore the economic impact from OZ legislation. One strand of the emerging literature suggests only limited effects from OZ legislation on employment, earnings, or poverty (Atkins et al., 2021; Freedman et al., 2021), or that any OZ employment gains occur only in metropolitan areas (Arefeva et al., 2021). As we discuss in more detail later, another thread of OZ research focuses on impacts in real estate markets, finding trivial effects on housing prices (Chen et al., 2020), or positive impacts but with no apparent change to transaction volume (Alm et al., 2021b; Bekkerman et al., 2021).…”