The United States Trade Representative office said Tuesday that new tariffs on certain consumer items would be delayed until Dec. 15, while other products were being removed from the new China tariff list altogether. It cited health and security factors. The duties had been set to go into effect on Sept. 1, so the announcement eased concerns about the holiday shopping season.
The US economy did pretty well during the Cold War. Per capita GDP rose by 150% in real terms from the end of World War Two through the collapse of the Soviet Union, with the stock market notching a similar inflation-adjusted performance. And when the long twilight struggle was over, America was on the verge of a historic productivity surge and technological advance.
Opportunity zone legislation is just too attractive for investors to sit and wait for the government to issue more guidelines around the practice, Urban Catalyst founder Erik Hayden said. Since the legislation, which provides tax incentives to investors who invest in selected distressed or low-income areas, passed at the end of 2017, investors have come off the sidelines.
When workers and retirees move to a new locale, local economies often reap a wealth of benefits. New residents not only pad a region’s tax base, they also contribute to the area’s vibrancy by shopping in local stores, purchasing area services or starting businesses of their own. As a result, states may compete to attract new residents and businesses.
These communities were chosen by governors from the wider universe of qualifying low income census tracts. Governors selected tracts that on the whole demonstrated far more distress across nearly every available social and economic measure than the eligible tracts they bypassed. The result is a map of both need and opportunity across which one of the most exciting economic and community development experiments in at least a generation will play out.
The economic divide in large cities continues to expand. Despite a financial resurgence following the 2007-2009 recession, the system wasn’t fixing itself. Enter Qualified Opportunity Zones (QOZ), a program included in the Tax Cuts and Jobs Act of 2017 designed to boost development in economically distressed communities.
A recent report by Cushman & Wakefield found that the 138 Opportunity Zone funds it tracks are targeting an aggregate total of more than $44 billion in equity. When some 200 smaller funds are factored in, overall capital inflows are expected to be anywhere from $100 billion to more than $6 trillion. Cushman & Wakefield also cited an MIT study that observed a 20 percent price premium for redevelopment of properties in the Opportunity Zones vs. outside the zones and a 14 percent premium on vacant development sites.
Qualified Opportunity Zones (QOZs) provide a unique opportunity for taxpayers to invest in low-income communities while also offering significant tax benefits. QOZs were included in the 2017 Federal Tax Cuts and Jobs Act (TCJA) and are designed to encourage investment and economic growth in designated low-income communities. While QOZs offer taxpayers significant tax benefits, the provisions are complicated and require careful consideration.
Opportunity zone investors are struggling with a requirement many say is bordering on outlandish—that they more than double the value of the building in which they invest in two and a half years. One solution that plenty are considering, and suggesting to their advisers, is to find ways to lower that starting value on paper.
There’s been a lot of chatter about The Opportunity Zone program and its effectiveness (or not). Though the program is still in its infancy, and a third round of guidance from the U.S. Department of the Treasury is anticipated, analysts have already started to release some metrics about the plan.