[guest author: Greg Manning]*
Deep in the 1,100 pages of the “big, beautiful bill” is a plan to retool and extend one of the big policies from the first Trump administration: Opportunity Zones. Under this tax incentive program, investors defer capital gains by directing gains into funds that invest long-term in designated Opportunity Zones nationwide. And taxes on gains on those investments are also deferred.
Local examples of Opportunity Zones include downtown Portland, Old Town and the close-in east side. In Portland, perhaps the best-known Opportunity Zone project is Block 216, aka the Ritz-Carlton Tower. But other local projects, including apartments, have taken advantage of these incentives too.
With incentives set to expire in 2026, the program needs a reboot. Critics say the program hasn’t done enough for rural and low-income areas that the zones were intended to help. This criticism rings true, like the old adage that you have to have money to make money — nationally the bulk of Opportunity Zone development has occurred in urban areas and neighborhoods that were already experiencing growth. On the other hand, proponents point to a significantly lower average cost per unit to construct housing compared to projects outside Opportunity Zones.
The proposed Opportunity Zone changes seek to restrict eligible zones to lower-income communities and to step up tax benefits for rural areas. If passed, this will require states to rework Opportunity Zone maps. Also, the changes aim to direct more investment into non-real estate operating businesses to better reach under-invested areas.
Working on development proformas and feasibility analysis around the region, Greg knows that many projects need a “yield boost” to get out of the ground in today’s cost/rate environment. He has also seen rural Oregon communities from the coast to the high desert eager for workforce apartments to meet demand. Even the state’s largest jurisdiction, Portland, is trying to jumpstart its low level of residential permits.
Trump’s bill recently passed the House and is under very public consideration in the Senate. If the revamped Opportunity Zone program can provide that yield boost for some area projects, without overly restricting zones or fund uses, this portion of the bill would be worth passing into law.
*Pioneer Project Partners
