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Opportunity Zones: What We Know and What We Don’t

January 2019

Scott Eastman, Nicole Kaeding


This article reviews the effects of place-based incentive programs, namely opportunity zones, as well as the effect that these zones have on their residents. The article finds that place-based incentives can be difficult to measure due to geographies, but also finds that there is no consensus on whether these programs work as intended and can often lead to replacement of nonsubsidized firms. Displacement of residents and underutilization of local workforce were also concerns raised. This displacement could be exacerbated by this economic development, pushing out the residents of the area the incentive was meant to bring economic growth.

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Policy Implications

The effects of the program are still not known to their full extent. Other alternatives to effectively develop these economically distressed communities should be researched and compared with the opportunity zones program. However, displacement of residents from these zones is a problem that is not addressed in the program’s guidelines, meaning its intentions to bring development to these areas cannot be properly realized. Policymakers should make note of this fact. Future policies may want to include protections for the residents of these zones, including making a requirement to hire locals on projects, having the project fit the needs of the residents, etc. These stipulations would hopefully ensure these zones are used to directly benefit the people they were made to serve.

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