On July 22, CLPHA attended a listening session at HUD headquarters where HUD staff and PHA industry stakeholders discussed ways to ensure affordable housing can benefit from Opportunity Zone investments. The listening session follows a notice in which HUD asked for input on a variety of issues related to Opportunity Zones, including: ways to incorporate Opportunity Zone investments into competitive HUD grant programs; existing regulatory barriers to Opportunity Zone investment; technical assistance opportunities; and ways to evaluate the impact of Opportunity Zones on affordable housing development.
After introductory remarks by Hunter Kurtz, Assistant Secretary of Public and Indian Housing (PIH), and Scott Turner, Executive Director of the White House Opportunity and Revitalization Council, Counselor to the Treasury Secretary Dan Kowalski provided an update on investments in Qualified Opportunity Funds and an overview of how taxpayers can reduce taxes on capital gains by investing in Opportunity Zones.
The remainder of the listening session was dedicated to a discussion with in-person attendees and callers about actions that HUD can take to facilitate investment in affordable housing projects through Opportunity Zones. The discussion, led by Mindy Turbov, Director of Choice Neighborhoods, and Tom Davis, Director of the Office of Recapitalization, touched on issues such as the role of philanthropic organizations in Opportunity Zone investments, strategies for avoiding displacement of long-term residents, and the role of cities and workforce development boards in promoting affordable housing investments.
There was general consensus that there are significant obstacles to Opportunity Zone investment in affordable housing. There was considerable skepticism from participants as to whether investors will be attracted to affordable housing development given the lower rate of return on investment, and instead be drawn to commercial investments in gentrifying or gentrified areas that may contribute to displacement.
HUD is eager to hear about the experiences of PHAs who are participating in an Opportunity Zone investment. If your PHA is participating in an Opportunity Zone investment, please contact Senior Research & Policy Analyst Emily Warren at ewarren@clpha.org.