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Do opportunity zones create opportunities? The impact of opportunity zones on real estate prices

Author

Listed:
  • James Alm

    (Tulane University)

  • Trey Dronyk-Trosper

    (Tulane University)

  • Sean Larkin

    (U.S. Census Bureau)

Abstract

The Tax Cuts and Jobs Act of 2017 allowed governors of the fifty states to designate low-income areas as “Qualified Opportunity Zones” (QOZs). This designation entitled investors in these QOZs to significant tax incentives, with the goal of creating economic opportunities in these areas. In this paper we estimate the impact of QOZ designation on several dimensions of economic development – residential and business real estate prices – using data from Florida for the period 2016-2020 and controlling for endogenous QOZ designation in several estimation approaches. All estimation results indicate little consistent and robust evidence that QOZ designation had a positive impact on sales prices for single family homes, commercial lots, or vacant lots.

Suggested Citation

  • James Alm & Trey Dronyk-Trosper & Sean Larkin, 2023. "Do opportunity zones create opportunities? The impact of opportunity zones on real estate prices," Working Papers 2303, Tulane University, Department of Economics.
    • Handle: RePEc:tul:wpaper:2303
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    More about this item

    Keywords

    opportunity zones; tax incentives; place-based development policies; regression discontinuity estimation;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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