Wednesday’s deadline for identifying such zones under a provision of last year’s Tax Cuts and Jobs Act forced tough choices. States were able to choose no more than one-quarter of their low-income neighborhoods for investments that will let investors defer and reduce capital gains taxes.
An even tougher challenge is ensuring local residents aren’t displaced by gentrification. In a post on CNN, Kresge Foundation’s Rip Rapson and LISC’s Maurice Jones argue for community plans that support jobs, entrepreneurship, education, health and safety in the same place at the same time.
“Each investment reinforces the others,” they write. “Family incomes rise. Businesses flourish. People live better.” Rapson and Jones cite Boston’s Brockton Neighborhood Health Center, which teamed with a family-owned grocery store to build both a clinic and a market on an abandoned corner.
Kresge and LISC, along with Morgan Stanley, leveraged New Markets Tax Credits to help finance the project. “Today, that once dark corner is a hub of activity.”
Go deeper:
- Transform Finance will host a webinar Thursday, March 29 (1:00 pm EDT), with Fran Seegull and John Cochrane of the US Impact Investing Alliance, to discuss how impact investors can shape the tax law opportunity. Register here.
- Meet John Lettieri and Steve Glickman, architects of the Investing in Opportunities Act. Read, “Turning capital gains into community investments,” in ImpactAlpha’s New Revivalists series.
John Lettieri and Steve Glickman: Turning capital gains into community investments
