Investing in Opportunity Act
On April 27, Senators Tim Scott (R-SC) and Cory Booker (D-NJ) introduced the “Investing in Opportunity Act”, a bill which aims to improve the economy of distressed areas through a capital gains deferral in exchange for reinvestment. This bill was also introduced in the House by Representative Pat Tiberi (R-OH) and Ron Kind (D-WI) as H.R. 5082.
Under the Investing in Opportunity Act, private investment in economically distressed communities would be encouraged by a temporary capital gains deferral for reinvestment in “Opportunity Zones” — geographically targeted low-income areas that will be designated by state governors. The capital gain from the sale or exchange any asset held by the taxpayer would be pooled into newly-created “Opportunity Funds”, which would be established specifically for making investments in distressed communities.
The legislation does not specifically acknowledge housing, but according to staff of Representative Tiberi, the capital gain from the exchange of housing assets would not be prohibited. There is also no language in the bill which describes the considerations to be made for the transfer of housing stock.
Senator Tim Scott cites research by the Economic Innovation Group, which recently found that more than 50 million Americans live in economically distressed communities. The Opportunity Funds created by this legislation seek to provide a high-impact source for funding new businesses, developing blighted properties, investing in local infrastructure projects, financing facility construction or refurbishment, and a host of other activities to sponsor new opportunities for local residents and enhance the local economy.
NAHMA will continue to track this bill to see if any housing provisions are added.