The Opportunity Zone (OZ) program may be getting a longer lifespan under bipartisan legislation recently introduced in the House of Representatives.


The Opportunity Zones Extension Act of 2021, sponsored by Reps. Tim Burchett (R-Tenn.) and Henry Cuellar (D-Texas), would extend the program from December 2026 to December 2028. 


Before the COVID-19 pandemic, OZs have generated an estimated $52 billion in new investment and created 500,000 jobs, according to Burchett and Cuellar.


“The Opportunity Zones program was making a difference in East Tennessee communities and underserved areas around the country before the COVID-19 pandemic rocked our economy,” Burchett said in a news release. “Extending this program would give investors additional time to provide meaningful financial support to businesses and create quality, good-paying jobs in Opportunity Zones.”


The Opportunity Zones Extension Act could help stimulate economic growth


Cuellar called the bill a critical legislation that “will help stimulate economic growth, job creation and provide support to underdeveloped communities.”


“Through this legislation we will be able to help accelerate our economy’s recovery from the pandemic,” he said. “I am committed to making sure everyone has access to opportunity and can achieve the American Dream.”


Industry insiders say extending the OZ program would be a boon for many economies that were distressed before and after the pandemic.


“When this program was enacted as part of the Tax Cuts and Jobs Act in 2017, no one could have predicted that a global pandemic would disrupt projects and businesses across the globe,” said Valerie Grunduski, a CPA and principal with the Detroit office of Plante Moran. “The IRS and Treasury have already sought to provide relief to those who might have been in the process of utilizing the Opportunity Zone benefits. It seems intuitive that it also makes sense to expand the overall use of the program to those who were negatively impacted due to COVID.”


Matthew E. Rappaport, an attorney with Falcon Rappaport & Berkman PLLC in New York, agreed.


“There has been enough steady interest in the program since introduction, and investment should continue at roughly the same pace as the last 18 months or so regardless of whether this bill passes,” he said.


Rappaport added that he has worked on affordable and workplace housing through the OZ program.


“America has a nationwide housing shortage that the OZ program is making strides toward solving,” he said. “Of the operating business projects I’ve worked on, the dialysis laboratory in the Brooklyn Navy Yard stands out as an example of an OZ venture that is helping the local community with essential services.”


Continuing to help distressed areas in Opportunity Zones


Brad Cohen, a partner with Jeffer Mangels Butler & Mitchell LLP in Los Angeles, said he too wants to see the program extended.


“I do see locals being hired to work at the properties/business, but the gentrification has caused distribution for personal and business renters,” he said.


Cohen urged the OZ program to be changed to ensure that the local communities benefit and any detriment to locals is mitigated.


Grunduski said the OZ initiative could help the country recover from the pandemic.


“There is a strong community of people who are deeply vested in helping ensure that this latest economic and community development tool leads to real results and outcomes for distressed communities,” she said. “I am optimistic that this combination of tax incentives and socially responsible investment can be instrumental in helping the hardest hit areas of our country come out of the pandemic stronger than ever.”

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