The country’s Opportunity Zones already contain 24 million jobs and 1.6 million places of business. Many can harness some positive momentum as well: Three-quarters of zones are located in zip codes that experienced at least some level of post-recession employment growth from 2011 to 2015
Within the 50 states and D.C., Opportunity Zones are home to 31.3 million people (all figures reported here are sourced from the American Community Survey’s 5-year estimates for 2011-2015, the dataset that determined a census tract’s eligibility). The figure rises to 35 million including Puerto Rico and the other territories. Fifty six percent of Opportunity Zones residents in the 50 states plus DC are minorities, compared to 54 percent of the population of all LICs and 38 percent for the country as a whole. Over three-quarters of certified tracts lie within metropolitan areas, but Opportunity Zones are nearly evenly split between high density (urban) zip codes and low density (rural) ones, with the remaining 22 percent in medium density (suburban) communities.
Less than 4 percent of zones have recently experienced high levels of socioeconomic change, a proxy for gentrification and displacement risk. The average Opportunity Zone’s housing stock has a median age of 50 years, more than ten years older than the U.S. median—a sign that many of these neighborhoods urgently need reinvestment.
Median family incomes also underscore the emphasis states placed on need: The average Opportunity Zone has a median family income equal to only 59 percent of its area median, compared to the 80 percent eligibility threshold. On average, the unemployment rate in these communities is 14.4 percent, and 38 percent of prime age adults are not working—a figure that is nearly 10 points higher than the country as a whole.
Because of the wide latitude afforded governors in the selection process, some observers worried they would simply target already-gentrifying areas that had little need for a new incentive to attract investment. However, less than four percent of Opportunity Zones experienced high levels of socioeconomic change from 2000 to 2016, according to a dataset developed by the Urban Institute. A number of states took Urban’s dataset into account when vetting zones, and Oregon created its own indicator of gentrification pressures. In fact, the average Opportunity Zone’s housing stock has a median age of 50 years, more than ten years older than the U.S. median. Half of Opportunity Zones are also communities eligible for the Low-Income Housing Tax Credit. And more than two-thirds contain brownfield sites tracked by the Environmental Protection Agency. These results speak to the widespread and urgent need for reinvestment across the nation’s Opportunity Zones, and should allay many of the initial concerns about the potential for displacement of local residents.
And there is real reason for optimism: 75 percent of Opportunity Zones are located in zip codes that experienced at least some level of employment growth from 2011 to 2015, and 64 percent in zip codes with increases in business establishments over the period. Opportunity Zones can help add greater momentum and reach to these fragile local recoveries.