The Tremendous Value of Opportunity Zones
In 2017, Congress introduced the Opportunity Zone (OZ) program as part of the Tax Cuts and Jobs Act (TCJA), designed to drive private investment into economically distressed communities - both rural and urban alike. Provisions of this program were incorporated into the TCJA by Sen. Tim Scott (SC), and Sen. Cory Booker (NJ). Since its inception, the program has been strongly supported and championed by President Donald Trump. In August 2020, President Trump issued an executive order directing federal agencies to prioritize Opportunity Zones for federal site locations, further emphasizing his commitment to the initiative.
Between 2018 and 2020, OZ investments totalled at least $48 billion, resulting in the creation of approximately 780,000 new U.S. jobs (House Ways & Means). From 2017 to 2022, the program garnered $100 billion in U.S. equity investments.
Opportunity zone investment has been proven to drive U.S. small business growth, advance technology-driven industries, and strengthen U.S. manufacturing. As we enter 2025, Congress has the opportunity to expand and refine the Opportunity Zone program to maximize its reach and effectiveness.
Revitalizing Small Businesses, Entrepreneurship, Technology, & Investment
U.S. Small businesses are the driving force of our economy, yet many struggle to access capital, particularly entrepreneurs outside of larger metro areas like New York City or Chicago. Small businesses and startups often face hurdles in attracting Opportunity Zone capital due to stricter qualification requirements, longer return timelines, and investor preferences for more predictable real estate-driven returns.
Expanding the OZ program to include additional incentives, streamlined qualification processes, and direct funding mechanisms for startups and small businesses would help better align OZ benefits with entrepreneurial growth. Expanding OZ investment in this way will support small enterprises—particularly tech startups, advanced manufacturing, and community-based businesses in regions across the country. Opportunity Zone expansion can help democratize innovation and build new innovation ecosystems beyond Silicon Valley.
U.S. Technology & Global Competitiveness
The U.S. faces increasing global competition in technology innovation. Expanding the Opportunity Zone program to attract capital into U.S. tech hubs in regions across the country will spur job creation in high-growth industries such as artificial intelligence, renewable energy, semiconductor production, and cybersecurity. Strategic investments in research parks, technology accelerators, and public-private partnerships will bolster America’s leadership in innovation while fostering economic growth. Congress can unlock these new opportunities for sustainable economic resilience now.
U.S. Manufacturing
A resurgence in domestic manufacturing is critical to national security, job creation, and economic resilience. By expanding OZ incentives for advanced manufacturing, Congress can stimulate investment in facilities that produce critical U.S. goods such as semiconductors, advanced aerospace components, emergency response vehicles and fire apparatus, PPE, medical supplies, for example. "Made in USA" is much more than just a stamp on a box - it connotes craftsmanship, reliability, resilience, and American ingenuity. Designating specialized Opportunity Zones for industrial development, coupled with tax incentives for on-shoring production - bringing facilities back to America -will reinvigorate the U.S. manufacturing sector.
To fully maximize the impact of the Opportunity Zone program, Congress must extend several key deadlines:
- Capital Gains Deferral Deadline – Currently, investors must reinvest capital gains into an Opportunity Zone fund by the end of 2026 to qualify for tax deferrals. Extending this deadline will encourage more long-term investments in distressed communities
- Qualified Opportunity Fund (QOF) Investment Timeline – The requirement that funds deploy capital within 31 months can be restrictive, especially for complex projects. Extending this timeframe will provide investors with greater flexibility to complete projects that have substantial community impact
- Step-Up in Basis Incentives – The ability to receive a 10% or 15% step-up in basis for holding OZ investments for five or seven years was only available for investors who entered the program by 2019. Reinstating and extending these incentives will encourage new participation in the program.
- Program Expiration Extension – The Opportunity Zone program is currently set to expire in 2047. Extending this timeframe will provide long-term stability, ensuring sustained investment and economic development in qualifying communities.
Expanding and refining the Opportunity Zone program in 2025 is essential for strengthening small U.S. businesses, advancing technology, revitalizing manufacturing, and promoting equitable rural development. By strengthening this critical program, Congress can help create a more innovative, resilient, and competitive American economy.