CEA Forecast: Extending Opportunity Zone Incentives Could Unlock $100 Billion in Investment
By Staff
A new report from the White House Council of Economic Advisers projects that extending opportunity zone tax incentives beyond their scheduled 2025 expiration could drive more than $100 billion in new investment into economically distressed communities. The projection comes amid mounting debate over the future of the 2017 Tax Cuts and Jobs Act, which originally established the opportunity zone program.
The CEA’s April 2025 analysis, The Economic Impact of Extending Expiring Provisions of the TCJA, frames the continuation of opportunity zones as a high-return economic lever, linking the program to measurable improvements in employment and housing supply in low-income neighborhoods.
“Distressed communities will see decreased investment from the disappearance of OZs,” the report warns, listing the lapse of opportunity zone benefits alongside rising marginal tax rates and lost deductions as key risks of allowing TCJA provisions to sunset.
The CEA report highlights a study by a team of leading real estate and economics scholars: Alina Arefeva (University of Wisconsin–Madison), Morris A. Davis (Rutgers Business School), Andra C. Ghent (University of Utah), and Minseon Park (University of Michigan). Their research, published in Management Science, examined the labor market impact of opportunity zones using granular establishment-level data and found that opportunity zone designation led to a 3 to 4.5 percentage point increase in employment in metropolitan communities compared to similar non-designated areas.
The CEA report also highlights a working paper from the Economic Innovation Group that provides some of the first robust evidence that opportunity zones significantly boosted housing development in low-income areas. By analyzing address-level data from the U.S. Department of Housing and Urban Development and the Postal Service, the team found that opportunity zones nearly doubled the rate of new residential addresses—generating more than 313,000 new units between 2019 and 2024. The authors also emphasize the program’s cost-effectiveness in stimulating housing construction relative to other federal interventions.
This assessment generally aligns with Novogradac’s; the a certified public accounting, valuation, and consulting organization said that since TCJA’s enactment, the opportunity zone incentive has been a driving force behind a substantial influx of private capital into low-income communities throughout the nation.
Originally introduced as a targeted capital gains incentive to stimulate private investment in designated census tracts, opportunity zones had attracted an estimated $85 billion in equity capital since inception as of the close of 2022, according to the CEA. Factoring in debt leverage, the total economic footprint may be significantly larger.
By tying OZ impact metrics to broader macroeconomic goals—such as GDP growth, labor force expansion, and income mobility—the report seeks to reframe the program from an experimental tax break to a core component of the federal investment toolkit.
“Extending and building upon Opportunity Zones would likely pave the way for $100 billion or more in ongoing new investment,” the CEA notes, “dramatically boosting job growth and serving a crucial role in addressing America’s housing affordability crisis.”
With most TCJA provisions set to expire on December 31, 2025, industry stakeholders are preparing for what may be the most consequential tax negotiation since 2017. While some critics have called for stricter OZ reporting requirements or geographic recalibration, the CEA’s endorsement underscores growing momentum for renewal, if not expansion.
Lawmakers from both sides of the aisle have signaled openness to opportunity zone reform, suggesting that any reauthorization may include adjustments to transparency, anti-abuse safeguards, and performance measurement.
A January 2025 letter from the Novogradac Opportunity Zones Working Group to President Trump’s transition team and the then-nominee for deputy secretary for the U.S. Department of the Treasury – Michael Faulkender – called for the administration to consider regulatory and legislative efforts to enhance and reinforce the opportunity zones incentive, including permanency in the Internal Revenue Code.
In November, AltsWire’s publisher hypothesized that opportunity zones might prove to be the real winner of the November election.
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