Opportunity Zones May Get a Second Chance. Let’s Not Waste It

Lessons learned from the first version of the program can allow Opportunity Zones 2.0 to be even better, but it is up to the industry to advocate for what works.

After years of speculation that the program’s benefits could be allowed to expire, recent comments from the Trump Administration suggest the initiative might be getting a reprieve. Created in 2017, the Opportunity Zones initiative allows taxpayers to defer taxes on realized capital gains if they are reinvested in a Qualified Opportunity Fund for projects in designated Opportunity Zones. While there has been bipartisan support for expanding the program, this tax deferral benefit is set to end on December 31st, 2026, unless the program is extended.

Hope for extension, or for a revamped “Opportunity Zones 2.0” version of the program, comes as HUD Secretary Scott Turner recently called Opportunity Zones, “a great platform and a great vehicle for us to build affordable housing and new operating businesses which will be a blessing to our country.  Additionally, President Trump also had high praise for the program, calling it “probably the number one economic development project ever.” Based on these comments, it seems likely that we will soon see an extension, expansion, or complete overhaul of the program.

The success of the first iteration of Opportunity Zones

Opportunity Zones were introduced as part of the Tax Cuts & Jobs Act of 2017. It has been estimated that through 2022, the program generated $85 billion in investment in distressed communities. This investment was also spread around: by 2020, 48% of Opportunity Zones had received investment, with areas receiving investment averaging “in the 87th percentile for poverty, 81st for median household income and 80th for unemployment,” a sign the program was working as an economic initiative targeting low-income areas.

Notably, Opportunity Zones investments have spurred impact in many forms, including investments in affordable housing, green energy, sustainable agriculture, and commercial real estate. In terms of the amount of investment and diversification across census tracks, Opportunity Zones have outperformed many similar government initiatives. Additionally, as noted by a 2025 study conducted by the Economic Innovation Group (EIG), “OZ designation results in a significant increase” in the housing supply when compared to tracts that weren’t designated, while a separate study, conducted by University of California-Berkeley economist Harrison Wheeler, found that home prices in Opportunity Zones rose without increases in the cost of local rents.

Importantly, investors are excited by the impact potential of Opportunity Zones and are eager to invest in these projects – and not just because of tax breaks. As evidenced by JTC’s impact investing survey, these investors prioritize making a positive impact and are keen to ensure their investments generate meaningful benefits.

The future of Opportunity Zones: fund administration and impact reporting

When asked about improving the effectiveness of Opportunity Zones, industry stakeholders resoundingly responded that the lack of data was a problem. The initial legislation did not contain impact reporting requirements, meaning the industry had a difficult time proving to lawmakers, voters, and investors that the program was really working.

As the future of Opportunity Zones is being debated, government officials and industry stakeholders should consider the inclusion of impact reporting requirements. This includes reporting at the national level, so lawmakers and voters can see the actual effect the Opportunity Zones initiative is having, but also at the project level, so investors and community stakeholders can see which Opportunity Zones projects are doing the most for underserved communities.

JTC has pioneered best practices for Opportunity Zones fund administration, which includes providing impact reports that offer insight on a project’s potential, as well as actual impact on the surrounding community, which allows investors to better evaluate projects and investment opportunities.

For more information on our fund administration solutions, and our impact reporting models, please contact Michael Richards or Edward Smith.