Opportunity Zones

Opportunity Zones are one of the largest federal community development tax incentive in the United States; recently renewed by federal tax changes. Opportunity Zones were designed to mobilize private investments in lower-income communities by incentivizing the reinvestment of capital gains into projects in designated census tracts. Incentives include deferral of tax liability, step-up in basis, and tax-free growth. Qualifying investments include real estate, business expansion, manufacturing, energy, and other projects. Designations last 10 years and cannot be revised; the new round of designation is currently underway and set to take effect on January 1, 2027.

In April, the federal government released their list of eligible census tracts under Opportunity Zones 2.0. Here is a map of those eligible census tracts: https://medc.maps.arcgis.com/apps/instant/basic/index.html?appid=a15ff0c7a745419ab4092c4e5c6000fa

By the end of September, the state will officially nominate up to 25% of those eligible tracts for designation as OZ 2.0 tracts.

Between now and that official nomination, interested parties are encouraged to share their input and recommendations with the State of Michigan via the Michigan Economic Development Corporation. A series of stakeholder roundtables will be scheduled this summer in each of the state’s prosperity regions; these will be coordinated with local housing and economic development organizations as they are scheduled. Additionally, a virtual platform and email input will be accepted to guide the state’s designation.