This is the first installment in an exploratory and investigative series called “How To Do Opportunity Zones Right.” This series will highlight Opportunity Zones’ projects, investments, collaborations, ideas and important happenings across the country that seek to meet the original intent of the Opportunity Zone legislation.
The purpose of the Opportunity Zone legislation is to create economic revitalization, increase jobs and reduce poverty, which this series aims to highlight.
Tell The Whole Truth
If funds created to finance real estate and businesses in Opportunity Zones ultimately produce healthy community revitalization, it will be directly related to community members’ engagement in expressing their power through unique partnership and dealings with investors. However, a recent New York Times article on Opportunity Zones, titled How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich, has left a potentially damaging impact on how communities might engage in the Opportunity Zone era. The title classically sets the stage for a 4,000+ word report that hurls shade at the Opportunity Zone legislation because high profile real estate figures are getting a tax break.
Are the findings of the New York Times article accurate? Presumably yes when it’s printed by the New York Times. Was this story “all the news that’s fit to print” on Opportunity Zones? Absolutely not.
Journalists that earnestly seek greater economic equality will undoubtedly seek out and find Opportunity Zone projects that hired only a few, serviced the rich and produced a tax break in the process.
However, the effect of this style of journalism not only sheds light and inures shame on policymakers and the wealthy, but more unintentionally, it renews apathy in the community members who are still trying to understand how or if Opportunity Zones could help their neighborhood.
Just as communities and their members are gaining more power over real estate decisions in their neighborhoods - consider Amazon's HQ2 experience in New York City and how differently that might have played out just 20 years ago – it becomes critical to showcase a balanced story on incentives like Opportunity Zones.
Why? When a well-intentioned article makes it seem as if the law has already become something bad - as the title suggests - it unintentionally eliminates the notion that community members still have significant time to make an impact using Opportunity Zones.
The “Yuck-Factor” Makes Matters Worse
At the core the New York Times article, How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich, puts the “yuck-factor” on Opportunity Zone investments in a way that materially harms decision-making at the community level.
What do I mean? Opportunity Zones are complicated – it is hundreds of pages of tax law that still have open questions. If you are not a sophisticated investor that understands Opportunity Zones well, you are likely to rely on advice from professionals and learnings from reputable news outlets. This is what makes the New York Times story so damaging to the intent of Opportunity Zones.
Imagine you are a nonprofit board member and resident in a community that is inside an Opportunity Zone. A local developer has asked your organization to be a partner on a real estate development deal. You have learned more about Opportunity Zones, but you wouldn’t call yourself an expert yet. Another board member sends you a New York Times article titled “How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich.” All else equal, are you more or less likely to be in favor of your Opportunity Zone partnership?
There are countless nonprofit leaders, impact investors and community members from both sides of the aisle that want to see communities of promise fulfill their longing of constructive redevelopment. In fact, from a legislative perspective, the original sponsors of the Opportunity Zone law have introduced new legislation to require investor reporting on impact measures. At the same time, some of the largest philanthropic organizations in the country have created financial vehicles for investment groups that agree to support positive impact in Opportunity Zones, including affordable housing and material job creation.
Good Intentions Can Result In Bad Outcomes: Focus on How To Do Opportunity Zones Right
The New York Times article made it more difficult for those who are getting communities engaged for the first time in decades around Opportunity Zones. The original title of this story was going to be “Why The New York Times Is Wrong On Opportunity Zones.” However, what became more compelling than an attention-grabbing title was to provide exposure and instruction over time on how to do Opportunity Zones right.
The hope of this “How To” series is to be a guide. The first instruction is to fellow journalists: seek out the balanced story. If you seek economic justice, recognize that each exposé on an Opportunity Zone real estate project that is below the mark should be matched with a lesser-told story of collaborations that achieves the law’s original intent.
Words can become self-fulfilling. Opportunity Zones, as the legislation is written, have the occasion to positively impact communities only if members of the community itself participate and remain engaged. The conjunction of community interests and investor interest will take time to find. Community member perseverance will stem from a belief in one's efforts materializing for a greater good or the observance of others succeeding in similar attempts toward a fruitful community outcome.
Reporting on a limited and selective scope damages the relationships between communities and investors that are currently trying to find ways to operate within an Opportunity Zone and enhance the lives of the existing residents. Not telling the entire truth restrains substantial growth. Don't just tell the truth, tell the whole truth, so help you God.