Today, Gov. Charlie Baker forwarded Massachusetts’ Opportunity Zone designations to the U.S. Treasury Department, aiming to spur long-term investment in qualifying Massachusetts communities. Established through the federal Tax Cuts and Jobs Act of 2017, this program enables private, tax-advantaged investment in economically disadvantaged areas, creating benefits for both zone residents and private investors.
The following municipalities are among those with state-designated opportunity zone tracts submitted for federal approval:
Boston
Chelsea
Lynn
Revere
Winthrop
“The opportunity zone program helps leverage private investment in Massachusetts cities and towns and can be a catalyst for job creation and economic activity,” Gov. Baker stated. “I look forward to working with our congressional delegation and local officials to support these new economic development opportunities across the Commonwealth.”
Through the Opportunity Zone program, taxpayers receive a federal tax incentive to reinvest unrealized capital gains into specialized investment vehicles called ‘Opportunity Funds,’ which focus on low-income areas designated as ‘Opportunity Zones.’ Governors in each state identify these zones from among low-income community census tracts.
Among Massachusetts’ 1,478 census tracts, the U.S. Department of Treasury identified 581 as eligible for Opportunity Zone consideration. Gov. Baker put forward 138 Opportunity Zones for designation, which represents the maximum allowable for Massachusetts.
In developing the state designation process, the administration consulted with municipal leaders and other stakeholders from communities containing eligible tracts. The application process opened on March 9th.
“As part of a collaborative process with communities, our administration empowered local leaders to nominate eligible tracts they believed would benefit most from this program, resulting in a diverse set of designations across Massachusetts,” Lt. Governor Karyn Polito remarked. “These communities range from small rural towns to Gateway Cities and large urban centers, representing a wealth of opportunities for new investment in the Commonwealth.”
Among the 138 designated tracts submitted for federal approval, 32 are in the 10 communities with the lowest median family income (MFI) statewide. Tracts from “Gateway Cities,” represent 48% of the total—these are municipalities with populations between 35,000 and 250,000 where median household income and the percentage of residents with bachelor’s degrees fall below state averages. Rural communities also participated, comprising 18% of communities with designated tracts.
Applicant municipalities detailed why their nominated tracts presented compelling investment prospects, described planning efforts already underway, and provided key demographic information including median family income, unemployment rates, and poverty rates for both the nominated tract and the surrounding community.
“We are committed to helping our cities and towns prepare for and attract investment, and we are enthusiastic about the possibilities represented by the Opportunity Zone program,” Housing and Economic Development Secretary Jay Ash noted. “Here in Massachusetts, our communities have proven that planning, site readiness, and community engagement are major factors in successful development. The tracts identified by the nominating communities reflect these characteristics and are worthy of consideration by the federal government.”
The U.S. Treasury has indicated it will respond to state submissions within 30 days.