Making an Impact Requires an Intelligent Platform and Asset Grade Data
Born out of the revised 2017 federal tax code, Opportunity Zones (OZs) denote a select number of designated census tracts that perform at a lower level than other comparable census tracts within a given state. These OZs intend to promote increased investment in those census tracts with key metrics and regulations dictating the level of investment, time, and capital in order to qualify for the tax incentives.
Recently, the Wall Street Journal published an Op-Ed, “Opportunity Zones Knock Where They’re Least Needed,” by Tony Mecia of the Charlotte Observer.[1] Mr. Mecia very critically and factually pointed out the ways in which investors can exploit the new tax code by investing in a designated OZ that meets the superficial requirements, but does not actually meet the logical requirements for disadvantaged status. For example, Mr. Mecia cites some key metrics that exemplify the potential loophole in Chapel Hill, NC: “But the zone’s median age is 22, 99.8% of residents have high-school diplomas, 49% say they have moved in the past year… the median value of owner-occupied housing is $500,000, or triple the state average.” Mr. Mecia goes on to detail further instances of improperly designated opportunity zones from Louisville, KY to Ft. Lauderdale, FL to Pittsburgh, PA and a Brookings Institute study that categorized thirty-three different college towns with proximate OZs.
Opportunity Zones can represent a critical opportunity for targeted investment and economic reinvigoration. Yet, as the Wall Street Journal Op-Ed describes, this chance to reinvest in these areas can be co-opted and corrupted by those seeking to make a greater return without regard for the tangible impact on the community.
Intentional investors looking to make a real tangible impact in a truly economically disadvantaged area or census tract deserve tools and methods that help them to make the right decisions in the right places. Understanding the critical metrics and being able to process the right data enables the right types of investments: those that do well and do good.
Immutably™ for Opportunity Zones provides those trusted and provenanced insights. By baselining important metrics and factors about a given city or neighborhood, intentional investors have the opportunity to pick the right targets that meet their goals and return real value for the community.
The goal of the platform is to provide deep, specific insight into these OZs along several critical dimensions:
- Existing infrastructure investment, both public and private, to baseline what services exist in the OZ;
- Industry and business clustering to best understand the present state of economic activity in the OZ;
- Social graphing of ownership and investment to gain insights into existing investors and industrials operating within the OZs
Cities and governments should be enabled with a platform like Immutably™ for OZ to ensure those outcomes. These outcomes should be evaluated by the framework of the United Nations Sustainable Development Goals and the desired socio-economic goals of these local communities. Investors working with communities in public-private partnerships and enabled with the right Asset Grade Data can achieve these goals together.
Context Labs, under the branding of subsidiary Spherical | Analytics, has already deployed its Immutably™ for OZ platform in Kansas City with investment firm Blueprint Local and the Kauffman Foundation. This applied methodology continues to inform and educate, zeroing in on specific neighborhoods, organizations, and prospects for investment.
Opportunity Zones possess untapped potential investment possibilities for those willing to take the risk. By using the Immutably™ platform, investors can learn the immutable truth about the economic, infrastructure, and other ambient conditions before investing to avoid the pitfalls of making a quick cash grab without real impact.
Learn more about Immutably™ for Opportunity Zones
Learn more about our work in Kansas City
[1] https://www.wsj.com/articles/opportunity-zones-knock-where-theyre-needed-least-11568412633