Carson: Opportunity zone investments to rebuild minority areas exceeding targets, hit $75 billion
'Enormous things are happening,' HUD Secretary Ben Carson said in a video interview with Just the News. 'It's anticipated that a million people will be lifted out of poverty, that the poverty rate will decrease by 11% in the opportunity zones.'
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Housing and Urban Development Secretary Ben Carson on Monday touted opportunity zone investments to rebuild minority areas, saying investments had exceeded projected targets and hit $75 billion at the end of 2019.
Carson noted that the White House's Council of Economic Advisers (CEA) submitted a report Monday looking at the status of opportunity zones created as a result of the Tax Cuts and Jobs Act allowing the investment of unrealized capital gains. Carson said it was anticipated by the Treasury Department that over a 10-year span, opportunity zones would be able to trigger $100 billion in investments. Carson and the CEA on Monday announced that the zones had already yielded $75 billion in only two years.
"Enormous things are happening," Carson said in a video interview with Just the News. "It's anticipated that a million people will be lifted out of poverty, that the poverty rate will decrease by 11% in the opportunity zones."
Carson said that property values increase by 1.1% immediately when opportunity zones are announced.
"That's an extra $11 billion in wealth to people who live in opportunity zones, half of which own their property," Carson said. "So, you know, things are being built, people are getting jobs and skills."
A provision of the 2017 Tax Cuts and Jobs Act allowed state executives to designate up to 25% of their low-income census tracts and some tracts contiguous with the low-income census tracts as qualified opportunity zones.
The census tracts must meet one of the following criteria: a poverty rate of at least 20%; that the tract is in not in a metropolitan area; a median family income does not exceed 80% of statewide median family income; the tract is in a metropolitan area, and median family income is less than or equal to 80% of the greater metropolitan area or statewide family income; or that the tract has a population of less than 2,000 people and it's within an empowerment zone and it’s contiguous to one or more low-income communities.
Carson noted that in Phoenix, Ariz., a convalescence center had been boarded up, but through a $22 million Opportunity Fund investment is now being converted to a center for people with behavioral disturbances. Carson said it would create 80 "high-paying" jobs.
"And it looks like it'll have an investment ratio of two and a half x," Carson said. "So people are going to be making money from it. It's going to be helping the people who are most in need."
The Trump administration noted that opportunity zones have an average poverty rate that is more than double that of other communities and are home to a higher share of African-Americans, Hispanics, and high school dropouts than other areas. It also reported that among all communities eligible to be in an opportunity zone under federal law, every state selected communities that, on average, had a lower median household income than those not selected.
Carson also highlighted a vertical farm in Wilmington, Del., which is hiring people as they come out of prison. It aims to decrease the recidivism rate "because they have someplace else to go to when they come out of prison."
Carson dismissed concerns that because of the investment structure, opportunity zones would simply make the rich richer and force minorities out of their neighborhoods through gentrification.
"These are the kinds of people who are being helped by the whole opportunity zone," Carson said. "And, you know, there's some people who like to pooh-pooh it and say, 'Yeah, that's only for rich people.' They have no idea what they're talking about. And they really need to read our report 'Best Practices' at opportunityzones.gov. And you can see the projects that are springing up all over the country."