As part of the 2017 Tax Cuts and Jobs Act, Congress created a new tax regime for investments in “qualified opportunity zones” (QOZs). The idea behind QOZs is to encourage private investments in economically distressed communities by giving tax benefits to investors who make qualifying investments. The QOZ tax benefits offer the potential for public agencies (e.g., local economic development agencies and green banks) and nonprofit organizations (e.g., foundations) to:
- sponsor clean energy, energy efficiency, and resilient infrastructure projects,
- locate these projects in economically distressed communities to create jobs and bring other economic benefits to these communities, and
- leverage their scarce funding with lower-cost private capital.