Page 9 - The GSE Report March-April 2018

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This should allow distressed communities to tap a multi-trillion-dollar pool of capital
to support a wide range of economic development activities. Funds could be broad or narrowly focused, with an emphasis on a single sector, such as housing development[s], charter school facilities, or broadband expansion. Other might be designed to raise startup funding for local entrepreneurs or help workers who are seeking job training.
Capital incentives alone aren’t enough to boost these communities. Governors and mayors will need to leverage Opportunity Fund investments with other economic development reforms. Governors might give entities located in a zone a competitive preference in grant competitions for education funding. Occupational licensing reforms could help reduce barriers to entrepreneurship in these communities. Or Opportunity Zone projects could combine different incentives for a larger impact, such as combining an Opportunity Fund housing investment with the Low-Income Housing Tax Credit for a mixed-use development.
Leveraging CDFI and CDBG funding could also be used to enhance the investment impact.
The Qualified Opportunity Zones incentives will be supercharged when combined with the broader policy reforms that are being advanced, including:
• The Administration’s initiative to impose a 2-year cap on permitting so that projects can be completed more quickly.
• The FCC’s growth-oriented regulations to support 5G services. The FCC has made relevant spectrum available for operators to deploy high-speed broadband wireless networks (for example, the 600 MHz spectrum)
and continues to work to release additional unlicensed, mid-band and mmWave spectrum available for 5G. In addition, the FCC is focused
on reducing the regulatory barriers for wireless broadband, allowing for small cell deployments that will bring broadband to rural America. 5G is the catalyst for the Internet of Things innovation, including “smart city” development.
• The Tax Cuts and Jobs Act’s first-year expensing provisions will be
an added incentive to boost investment in plants and equipment broadly, but will help stimulate investment in the zones too.(New York Times, Jim Tankersley, 01/29/18; CityLab, Kriston Capps, 4/25/18; American Enterprise Institute, John P. Bailey, 4/6/18; Tax Insights: Qualified Opportunity Funds Provide New Tax Incentives for Investors,
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