NAR: Realtors Critical to Opportunity Zones’ Affordable Housing
Opportunity zone laws create an ideal way to maximize profit when building affordable housing, but Realtors need to take the initiative and make it happen.
WASHINGTON – Real estate professionals can play a critical role in expanding affordable housing by facilitating transactions in opportunity zones – areas ripe for economic investment and new development – said Christopher Coes, vice president of land use and development at Smart Growth America at the National Association of Realtors®’ (NAR) Housing Opportunity Committee during the virtual 2020 Realtors Conference & Expo.
The federal Opportunity Zone program was created under the 2017 Tax Cuts and Jobs Act. The program’s goal is to revitalize distressed areas by offering investors significant tax breaks over the long haul.
With more than 8,700 communities nationwide designated as opportunity zones, projects that focus on residential and commercial real estate, as opposed to parks or other recreational amenities, have raised the most equity, Coes said.
Coe said opportunity zones can be used to create greater walkability in high-density areas, and developers can build more units with higher density. Abandoned or underutilized buildings can be repurposed to allow for greater equitable development.
Coes said the kinds of opportunity zones that are most attractive to investors include:
- Areas located in or near high-traffic corridors
- Areas where public and nonprofit-controlled land can be leveraged
- Areas where investors can protect existing affordable housing stock
- Areas that allow investors to engage with non-traditional stakeholders and the community to help close funding gaps
Real estate professionals know how to bring multiple stakeholders together to get transactions done, which is needed for smart growth initiatives within opportunity zones, Coes said, “ and Realtors play a huge role. Affordable housing and opportunity zones need to have a dealmaker, someone who knows how to put these deals together. That is a Realtor.
“Affordable housing is not easy,” Coes continued. “Opportunity zones are not making it easier, but they are bringing more people to the table to talk about it. Housing affordability is not going to be addressed unless the Realtor community recognizes it as a priority and makes it an issue.”
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