The majority of Opportunity Zones established by Congress in the Tax Cuts and Jobs Act of 2017 have housing markets where the homes are priced below the national median, according to a report from ATTOM Data Solutions.
In a study of nearly 3,100 Opportunity Zones during the second quarter, it was determined that nearly 80 percent of those zones had median home prices below the national figure of $266,000, and half had median prices of less than $150,000. The report also found that the median second quarter prices in about one in four zones were less than 50 percent of the typical value in the wider metro areas where they exist.
The states with the highest percentage of Opportunity Zone tracts with a median price less the half the metro area figure included Alabama (55 percent), Pennsylvania (53 percent), Illinois (51 percent), Ohio (47 percent) and Georgia (45 percent). States with the smallest percentages included Washington (one percent), Nevada (three percent), Oregon (four percent) Colorado (four percent) and Indiana (four percent).
“Opportunity Zones are among the poorest areas of the country, with some of the lowest home prices,” said Todd Teta, chief product officer with ATTOM Data Solutions. “This should come as no surprise because the zones are designed to be in or alongside economically distressed neighborhoods. But the differences between these and other areas in most parts of the nation are stark. The numbers provide key benchmarks for how much room there is for these areas to grow and how much new investment they need.”
Earlier this month, Housing and Urban Development (HUD) Secretary Ben Carson announced that the Federal Housing Administration (FHA) will begin insuring mortgages on mixed-use developments under the agency’s Section 220 Program in the lower income communities participating in the Opportunity Zones program. HUD's announcement came on the heels of the FHA offering incentives designed to spur investment by multifamily property owners in communities within the Trump Administration’s Opportunity Zones.