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Kresge signs on to letter regarding Opportunity Zones

Social Investment Practice

On Tuesday, The U.S. Impact Investing Alliance released a letter on behalf of its President’s Council on Impact Investing, of which Kresge President & CEO Rip Rapson is a member, urging more involvement from residents of Opportunity Zones in the execution of investments on the ground.

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Opportunity Zones are designated Census tracts, more than 8,000 in total across the country, which are eligible for investments that offer wealthy investors a number of generous incentives to lower their tax bills. Since their introduction in the 2017 Tax Cuts and Jobs Act, a growing debate has formed around the incentive’s lack of transparency, reporting requirements, and community participation — elements that have ensured other government tax incentive programs have truly benefitted low-income communities. Kresge’s Social Investment Practice has worked to invest in funds that will center efforts to improve outcomes for people with low-incomes through an incubation program for community development financial institutions that seek to raise Opportunity Zone funds and with $22 million in guarantee commitments to two socially-minded fund managers.

The letter states: “…this transformative tax break could leave residents and communities vulnerable to displacement. These residents understandably fear losing their voice in defining their economic futures. Meanwhile, there is no guarantee capital will flow to the most distressed neighborhoods, or to the projects that are best for those who work and live there. Indeed, many such Opportunity Zones are at risk of losing out and falling further behind, while Zones in already-gentrifying parts of urban areas like New York City or Washington, D.C., continue to draw the lion’s share of development capital.”

Read the full letter here. 

A public comment period was set to close on June 17. See all public comments here. 

Kresge staff is working remotely, and our offices are closed until further notice.  See our promise to partners during COVID-19.
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