White House Looks At 'Opportunity Zone' Extension In Wake Of COVID-19
NOEL KING, HOST:
This pandemic has had a devastating and disproportionate economic impact on American communities of color. President Trump has promised to try and address this. NPR's learned about one option that he's considering - extending a program that gives tax breaks to those who invest in certain low-income neighborhoods. So think real estate investments. This program has bipartisan support. It also has some serious critics.
NPR White House reporter Ayesha Rascoe has been following this one. Good morning, Ayesha.
AYESHA RASCOE, BYLINE: Good morning.
KING: What is the White House saying about this program?
RASCOE: So it's - the Opportunity Zones program was created by the 2017 tax cut law. It allows investors to defer and lower their capital gains taxes through 2026 if they put their profits into designated low-income areas. The White House is thinking about extending that program to provide more help to these communities. I spoke with White House adviser Ja'Ron Smith who's been a point person on this issue.
JA'RON SMITH: It's a tool, and there's a number of other tools we want to leverage. But we want to holistically figure out how we can be good federal partners.
RASCOE: He didn't say exactly what an extension might look like. And he did say this is just one of many options being looked at to help minority communities. But this program in particular has been a big part of the president's outreach to black and Latino voters with the argument that it's helping communities that have been left behind.
KING: The Opportunity Zone program has also attracted some criticism. Earlier this year, the Treasury Department's inspector general started investigating whether that federal tax break is helping wealthy investors instead of helping poor people who live in these communities. Has the White House said anything about whether they plan to prove that this is going to help the people it's meant to help?
RASCOE: So the White House and supporters of the program argue that it is helping. The issue is that the initial law did not include reporting requirements that would allow the public to know exactly how this money is being used. So backers of the program, they acknowledge this, and they're pushing for legislation to remedy that and to provide more information about these investments.
KING: How are these investments in Opportunity Zones - in low-income communities - how are they doing now in the middle of a health crisis?
RASCOE: It's not really clear. I talked to Mark Elliott. He founded the South Carolina Opportunity Fund, which has about $250 million in projects in the works. He acknowledged that some deals may fall through, but he said he's seeing other avenues open up, including possibly backing a face mask manufacturing plant in South Carolina.
MARK ELLIOTT: We're looking at hiring some recently laid-off folks from another manufacturer in South Carolina. And you know, our thought is that that's a great project. It's something that's needed right now.
RASCOE: So there are projects moving forward.
KING: How much impact would expanding Opportunity Zones really have in such a severe economic downturn?
RASCOE: Supporters say that it will make a difference in places that would have a hard time bouncing back. But you know, talking to some other experts, they say that there have been some success stories. But a lot of the investment has been in real estate and not in operating businesses. And it's not clear that all zones are benefiting from this program, so it's hard to say what - how much of a difference this could make.
KING: NPR White House reporter Ayesha Rascoe.
Ayesha, thanks so much.
RASCOE: Thank you. Transcript provided by NPR, Copyright NPR.