On Thursday, June 5th, LOCUS and Smart Growth America kicked off the “Building the Stack” webinar series, a series of conversations with real estate developers and community partners focused on demystifying how to finance and build high interest projects, with the first webinar on utilizing the federal Opportunity Zone tax incentive to build housing.

The Building the Stack series is designed to dig into the challenges with developing key project types, explore real case studies, and hear from a variety of stakeholders about their experience developing and financing these projects. With Congress poised to extend the federal Opportunity Zone (OZ) tax incentive, it is an important time for developers and communities to revisit successful uses of the OZ tool in its first iteration from across the country. Attendees heard from Natalie Mason of Capital Square, a developer behind several successful OZ-driven residential projects, Mayor Sharetta Smith of Lima, OH, who built a unique public-private partnership to bring OZ investment to her community, and Robin Schabes, a community development leader working to educate and connect stakeholders to drive OZ investment in Chicago.

Key takeaways

Each speaker highlighted the work taking place in the communities they operate in but across the discussion, a few key takeaways emerged:

1. The Opportunity Zone incentive has been a significant community development tool that has brought new investors into community development. Natalie Mason spoke to why the tool works for investors and how it helps fill gaps in project funding, particularly for multifamily residential deals.

2. Rural Opportunity Zones faced structural barriers to OZ investment, including a thinner developer pool, a capital preference for more urban geographies, and community concerns about transparency. Mayor Sharetta Smith spoke to the way that local government actors can help de-risk and spur OZ investment in their communities by seeding the first dollars for projects, doing intentional preparation for OZ investment, and leaning into partnerships with local institutions to support projects.

3. The Opportunity Zone incentive can, and has, delivered high-impact community serving projects. Robin Schabes highlighted impact-focused projects in the greater Chicago area, including the Hope Manor Village project which repurposed vacant lots into supportive housing and married OZ funding with the Low-Income Housing Tax Credit.

4. An extension of the Opportunity Zone incentive is included in the tax bill under consideration in Congress. While the precise details of the extension are not yet solidified, the webinar discussed the parameters of the program as was being discussed at the time. Sign up for the LOCUS newsletter to stay tuned for more updates on the extension as they become available.

Don’t miss the next installment!

On Thursday, July 24th, join us for a conversation on innovative approaches to housing development. Alternative approaches in financing or project development can be slow to move from one community to another. This conversation will feature leaders championing new models for funding and constructing smart growth-aligned housing types such as co-ops and affordable housing.

Learn more and register here!

Consider joining LOCUS

Are you a purpose-driven developer or investor? Consider joining Smart Growth America’s LOCUS coalition! LOCUS, latin for ‘place’, is a national coalition of real estate developers and investors who advocate for smart growth at the federal level, with occasional work at the state and local levels. LOCUS brings together real estate developers and investors from across the country to change policy and to build neighborhoods that are more economically, socially, and environmentally sustainable for America’s future. LOCUS is driven by the vision of a country in which every person lives in a vibrant and healthy community. Membership provides access to monthly briefings, policy development conversations, and curated newsletters to keep you and your organization informed. Take advantage of a 20 percent off discount on membership through the summer and learn more about joining LOCUS here!