When Forbes magazine said in July that 8,700 federal “opportunity zones” where investors can get a tax break, and used Montrose, Colo., as an example, "The phone started ringing off the hook," Mayor Roy Anderson told Stephanie Quinton of Stateline. But few rural places are getting such a head start, and similar programs in the past have helped urban areas more than rural. And when tax breaks are granted to rural places, experts warn, "it’s more likely to flow to real estate projects" such as a planned housing does flow to rural places, they warn, it’s more likely to flow to real-estate developers "rather than to local startups desperate for capital," Quinton writes.
The Internal Revenue Service "has yet to clarify all the details of the tax break," so "many investors are holding off," Quinton reports. However, "In hot real estate markets such as the Denver area ... opportunity zones already have set off a fundraising frenzy. . . . Smaller towns west of Montrose haven’t gotten as much attention."
“I’m worried that none of this money is going to flow where it’s really needed,” Paul Major, president and CEO of the Telluride Foundation, a Western Colorado philanthropy, told Quinton. “You can see 99 percent of the money going to urban-redevelopment projects and accelerating gentrification.”
The record offers reason for such concern. "Past tax incentives intended to spur growth in distressed areas, such as the New Markets Tax Credit program, have had mixed success," Quinton reports. "About 83 percent of New Markets money from 2001 to 2015 went to cities, according to research by Rebecca Lester," of the Stanford Graduate School of Business. "That may be because more people live in cities, because city projects are better-known, or because urban economies are stronger, Lester said. But she expects opportunity zone money to end up even more concentrated in cities than New Markets money, because there are fewer restrictions on how the money can be spent."
No comments:
Post a Comment