Tucked into the recent U.S. tax bill was a plan to draw billions of dollars in private capital into low-income communities across the country. Stock market investors with capital gains are now allowed to temporarily defer taxes by investing in low-income areas designated as “opportunity zones” for impact investing.
Meet John Lettieri and Steve Glickman, the policy wonks that scored a big win in December when the ‘Opportunity Zones’ proposal was included in the Republican tax bill. Lettieri, a Republican, and Glickman, a Democrat, are co-founders of the Washington think tank, the Economic Innovation Group, brought fresh thinking to a long-standing challenge: how to get the private sector involved in rebuilding American cities and rural communities.
ImpactAlpha: How can the new opportunity zone model change a community?
Steve Glickman: One example we often think about is a place like Baltimore. You’ve got a really important research university in Johns Hopkins, in a really important sector for the economy: healthcare technology. But you’ve got a situation in Baltimore where it’s very difficult to keep that technology and those entrepreneurs and businesses in the city. The zone model is a way to bring the capital to Baltimore as opposed to pulling the technology and entrepreneurs out of Baltimore.
ImpactAlpha: Beyond the tax incentives, is there a market opportunity in the revival of American cities and communities?
John Lettieri: We’ve spent a lot of time going around the country to places where traditional venture capital never shows up. We’ve seen firsthand a lot of very smart and high-potential entrepreneurs and great businesses that can be built in these types of communities and there are investors who do see that market opportunity now.
ImpactAlpha: Why do you think the opportunity zone idea is bipartisan?
Glickman: There’s a lot of interest from Democrats and Republicans to ensuring that we’re not just harnessing government or philanthropic resources, but also harnessing the private sector.
Read the full article about community investments through opportunity zones by Dennis Price at Impact Alpha.
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