Eleven neighborhoods across seven states and the District of Columbia have been named by ATTOM Data Solutions and the proptech firm CityBldr as possessing the best potential for using Opportunity Zone tax benefits to economically revive low-income communities.
The Opportunity Zones were created in the 2017 Tax Cut and Jobs Act. The 11 communities cited in the new ranking were identified by ATTOM and CityBldr were chosen based on a data analysis that identified them as “mostly-impoverished, densely-packed urban neighborhoods” that could generate “some of the most attractive opportunities in the nation for housing developers to take advantage of federal reinvestment tax benefits.”
The neighborhoods cited in this ranking are, in alphabetical order:
· Anacostia, South Shore and City Heights in the District of Columbia;
· Buckman/Kerns in southeastern Portland;
· Central District in eastern Seattle;
· Hilltop in central Tacoma, Washington;
· Mid-City in central Los Angeles;
· North End/New Center in northern Detroit;
· Parramore in west-central Orlando;
· Spartan Keyes in eastern San Jose;
· West Colfax in western Denver
Median household incomes in these 11 neighborhoods range from $20,205 in Tacoma’s Hilltop area to $57,009 in the Spartan Keyes section of San Jose, and all are beneath the national poverty level of $61,937. The neighborhoods’ population densities far exceed the national average of 93 people per square mile and all have poverty levels that are higher than the national rate of 13.1%.
Furthermore, between 53% and 98% of households rely on rental housing in these areas, compared to 36% nationwide. However, the housing markets in these communities are mostly solid: the typical home sells for more than the national median home price in eight of the 11 areas.
“This data tells us that housing developers should consider investing in these neighborhoods because they have an immense amount of potential, plus tax benefits aimed at realizing that potential,” said Bryan Copley, co-founder and CEO of CityBldr. “What we’ve done with this study is create a standardized score to compare every opportunity zone in the U.S. to determine which areas would yield the highest average return on investment.”
“Factoring in home values and how they’ve done in the past year adds a critical piece of data to the picture,” added Todd Teta, Chief Product Officer with ATTOM Data Solutions.
“Developers can get a demographic snapshot of what these areas look like, plus the hard numbers on how home prices are changing.”