Secretary of the U.S. Department of Housing and Urban Development Dr. Ben Carson was in Columbus Friday to tour one of the many opportunity zones across the country.
Opportunity zones were created as a result of Congress slipping the program into the tax reform bill that passed at the end of 2017 and are meant to incentivize investors to invest their money in areas that need economic development direly.
The governor of each state is required to nominate 25% of the state’s census tracks to be designated an opportunity zone. They must fit certain criteria such as:
- 20% poverty rates
- a median family income of no more than 80% of statewide or metropolitan area family incomes.
Governor Kasich submitted his list to the federal government which was then vetted by the Treasury Department.
The Milo-Grogan neighborhood was one of the areas to be designated as an opportunity zone in Columbus, and that is where Dr. Carson visited Friday.
Carson was shown a refurbished home by Homeport which is currently beiNG leased to Lakeisha Terry, a 23-year-old mother of two who will have the opportunity to buy the home from Homeport after 15 years of leasing it at a discount.
The home is one of several in the neighborhood that Homeport has worked on recently; each one recognizable by their identical designs and finishes, color schemes and layouts.
Terry is ecstatic her application to lease the home was chosen.
“With this house, this opportunity, it really made a big impact on my family,” said Terry. “I would never thought that I would be at 23 living in a house as beautiful as this.”
Homeport has been in this market for more than 30 years and the home Terry is in was already planned to be worked before the opportunity zone program was being put together.
However, it is an example of how their investment in the neighborhood can turn it around.
According to neighbors living down the street from Terry that have been in their home since 1978, the neighborhood started going downhill about 20 years ago.
It was only a few years ago that negative elements seemed to have moved on or were removed from the neighborhood, according to neighbors who say it is far less crazy than it had been before then.
And while some of the neighbors are eager to see a reinvestment in the neighborhood, there are several older residents who have concerns that gentrification will eventually push them out.
As the properties are rehabbed and property values begin to rise, they fear their fixed incomes will make it impossible to stay.
Bruce Luecke, the CEO of Homeport says he hears and understands those concerns.
“It’s a balancing act, a little bit of gentrification is not all bad because it helps values,” said Luecke. “Having said that; we don’t want that to become so extreme that the individuals who have lived here can’t continue to live here.”
The opportunity zone program gives investors a place to spend their money, but in order to make it attractive for them to do so the program appeals to their fiduciary desires by offering to defer taxes if they participate.
“A lot of people in recent years have benefited tremendously economically and now here is an opportunity for them to take some of those unrealized capital gains, plow them back into areas that have been economically deprived,” said Carson.
It is estimated the program will help investors defer around $7.7 billion in taxes between 2018 and 2022.
That impact will eventually lessen as time goes on, but some still have concerns.
Meanwhile, Terry is just happy she has a place to raise her two young boys that she feels is safe and near a number of places that will increase their quality of life; they can walk to a park and a recreation center from their home.
“Just to see the progression that [the program’s] already made is exciting,” said Terry. “It just gives you that hope, you know? The community, it’s really coming together.”