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How can Opportunity Zone investing help with the housing crises?
I am a developer who both want the best ROI in addition to making a social impact. How can I use the OZ tax incentive to make this happen?
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Developing residential property inside an Opportunity Zone works, but to maximize the tax benefits the fund has to own the properties for 10 years, which means building, renting and eventually selling after 10 years.
The opportunity zone benefits are directed to the development and sustainable economic development of those designated areas. Providing housing in those areas will be one of the ways to promote this economic development. You will need to pay close attention to complying with all the requirements in order to provide your investors (those interested in deferring capital gains) the benefits included (deferral and exclusion of capital gains).
The Opportunity Zone program supports multifamily housing development really nicely, so you could use your funds to engage in that type of project. Would stay away from heavy NIMBY jurisdictions, however (NYC metro, SF metro, LA metro, Chicago metro).
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