Opportunity Zones


Opportunity Zones

Opportunity Zones were established in 2017 to encourage investment in low- to moderate-income communities


The 2017 Tax Cuts and Jobs Act established Opportunity Zones to encourage investment in low- to moderate-income communities through Qualified Opportunity Funds, fueled by tax incentives.

This legislation offers potential to significantly increase jobs and accelerate wealth creation in areas that most need it by unlocking some of the nation’s pool of unrealized capital gains, estimated at more than $6 trillion.

The Milken Institute is exploring the challenges and opportunities facing the implementation of Opportunity Zones and Qualified Opportunity Funds. We believe that a focus on best practices maximizes the potential impact.


52.3 million Americans live in economically distressed communities


Over two-thirds of job growth comes from small businesses, for whom the most important variable for success is access to capital


Between 2000 and 2016, three-quarters of net job growth occurred in a narrow selection of metro areas, resulting in inequalities across the country

What Is an Opportunity Zone?

An Opportunity Zone is a state or territory determined neighborhood marked as eligible to receive private investments through Qualified Opportunity Funds. These neighborhoods can be designated as such if they fall into one of two categories:

  • Satisfies the definition of low-income community (LIC), as defined in § 45D(e) of the US Code
  • Is a non-LIC tract that is contiguous to a designated LIC and the median family income of the non-LIC neighborhood does not exceed 125 percent of the median family income of the contiguous qualified zone

What Is a Qualified Opportunity Fund?

A Qualified Opportunity Fund is an investment vehicle set up for the purpose of investing in eligible properties located within an Opportunity Zone. Qualified Opportunity Funds are backed by capital gains and are required to deploy 90 percent of capital into Opportunity Zones.

Focus on Localizing

  • Identify and address local implementation barriers, including those created by regulation or tax policy
  • Facilitate investment through Qualified Opportunity Funds that support local infrastructure and public works projects

Focus on Collaborating

  • Promote regional and multisector collaboration to mitigate gentrification and displacement risks
  • Facilitate investment through Qualified Opportunity Funds that leverage existing economic development programs
  • Partner with local institutions to efficiently execute high-potential investments
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