Showing posts with label Community development. Show all posts
Showing posts with label Community development. Show all posts

Thursday, April 18, 2019

New Opportunity Zone Guidance

April 17th saw the release of a second set of guidance for the “Opportunity Zone” (OZ) program. As we noted in testimony to the IRS on February 14th, we remain concerned that the OZ program diverts needed tax revenue from public purposes and places this revenue in the hands of a mainly wealthy and white demographic unrepresentative of the US population as a whole. As the Hill Newspaper noted, the program has "drawn criticism from those who argue it will primarily benefit wealthy investors rather than residents of low-income neighborhoods." Today's regs do nothing to change this concern.

The regs released today benefit Opportunity Zone Funds (as opposed to residents). These funds are the financial vehicle used to make investments in Opportunity Zone areas. Today's regs are "designed to make it easier for funds to ensure that they are complying with a requirement that they have 90 percent of their assets invested in opportunity zones." In other words, the focus of IRS activity remains on investors, not community residents (despite the fact that all US citizens contribute to and pay for the IRS, not just wealthy and white real estate interests.)

Other points include:
  • Opportunity Zone "Funds will get additional leeway to invest capital on a more flexible timeline"
  • Opportunity Zone "Funds will have a 1 year grace period to sell assets and reinvest the proceeds, thus avoiding penalties intended to prevent funds from sitting on the cash."
  • Opportunity Zone "Funds will have more flexibility to include more than one investment in a fund. Investors will get special tax treatment if they’ve held their stake in the fund for at least 10 years, even if the fund didn’t own the asset for a full decade."
  • The requirement that OZ businesses generate at least half their gross income within their opportunity zone has been dropped. Now, "Treasury will allow businesses to qualify if at least 50 percent of the hours the employees work are within the zone, as long as it performs at least half of the its services within the area, or if there are significant management and operational functions present."
  • There is "no penalty if an investor dies and passes an interest in an OZ Fund to their heirs." Working capital "can be used for development of an operating business, not just a real estate project."
  • OZ Funds don't "have to take assets into account for purposes of the requirement unless the assets have been in the fund for at least six months. They also provide that if a fund sells an asset, it has up to 12 months to reinvest in a new appropriate investment."
In a nod to criticisms we and others leveled at the program on February 14th, Treasury requested "comments about how to best measure the economic impact taking place in the opportunity zones." During my testimony, I proposed two OZ program improvements: 1) I recommended regulations that would prohibit the President, senators, congressmen, and state governors from personally benefiting from the program; and 2) I suggested using the Ethereum blockchain to track and report Opportunity Zone investment social impact.

Looks like one of those suggestions got thru.

Note: there will be a hearing on these regs on July 9, 2019 at the New Carrollton Federal Building at 5000 Ellin Road in Lanham, Maryland 20706.

We'll be sure to raise these issues.

Friday, February 1, 2019

DC Econ UNPLUGGED Lanxi He, Research Analyst Intern, Creative Investment. Georgetown University

On January 31st, the Office of The Deputy Mayor For Planning And Economic Development presented DC Econ UNPLUGGED, which connected fashion, arts, entertainment, housing, transportation and others sectors to DC’s economic development. Event attendees shared opinions, thoughts and suggestions, and also enjoyed wonderful food and music.

First, a panel consisting of DC's fashion leaders - Kristopher Johnson-Hoyle, Editor, Chairman of the Mayor's Commission on Fashion, Arts and Events; Deidre Jefferies, Owner/Creative Director of ESPION Atelier, CFAE Commissioner; Mariessa Terrell, Fashion Attorney, Howard Law School IP Law Clinic Supervising Attorney, and CFAE Commissioner; Roquois Clark, Co-Creative Director, District of Fashion Runway Show, DowntownDC BID - talked about the impact fashion entrepreneurs have  on DC’s economy and ecosystem.

A second panel - Ernest Chrappah, Interim Director of DCRA; Shawn Townsend, Director of Nightlife and Culture; Fred Moosally, Director of ABRA; Jeff Marootian, Director of DDOT - discussed how DC’s nightlife is related to DC’s economy. Nightlife has always been seen as qustionable, even as something bad. Some perceive nightlife as being all about drugs and strip clubs.

A report by Patrick Sisson cites organizations that support nightlife-based industries. "Nightlife adds value and human capital," said Mirik Milan, Amsterdam’s Night Mayor. “Investing in the community, and in these subcultures, is now popular and important.” Other organizations point out that we need to focus more on how creative nightlife contributes to a creative city.

At the DC Econ UNPLUGGED event, Director of Nightlife and Culture Townsend also talked about why nightlife is important and how it generates revenue for the city. Mr. Chrappah discussed creating and maintaining a safe nightlife environment.

By the conclusion of the event, the panelists gave me a better understanding about how nontraditional services and resources grow DC’s economy.

Sunday, November 4, 2018

Opportunity Zones

The Tax Cuts and Jobs Act, passed in 2017, created new tax incentives for investments in what are known as Opportunity Zones: targeted areas in the United States. Investments are made via Qualified Opportunity Funds, who are directed to promote economic development in 8,700 disadvantaged rural and urban (read Native, African American and Hispanic) communities (low-income census tracts selected by state governors and certified by the U.S. Treasury Department) by offering investors substantial federal tax advantages.

As one analyst explained:

"Assume an investor has a $1 million gain in Apple stocks and decides to sell. To keep it simple, let’s also assume the investor is in a 20 percent tax bracket, totaling $200,000 in capital gains tax. But instead of paying, the investor reinvests the $1 million in an Opportunity Fund.

If the investor holds for more than 10 years: the investor pays ZERO capital gains tax on the appreciation of that asset."

These benefits are only available through the Opportunity Zone program.

Join us at our class https://www.udemy.com/opportunityzones/ or our webinar. 

Please join us as we discuss
  • Where Opportunity Zones are, geographically;
  • Creating a Qualified Opportunity Zone Fund;
  • What types of Opportunity Zone investments you can expect to see;
  • What companies looking for investments should be doing NOW;
  • Who are the major Opportunity Fund creators and investors;
  • New Opportunity Zone rules and regulations;
  • Who are the key OZ players in DC: House, Senate, Treasury and IRS Staff OZ directory.
  • Timing: When will the final rules be released.
  • Investment deadlines and timetables.
  • Economic Analysis of Opportunity Zone regulations.
  • How will Opportunity Zones impact minority communities.
  • Making investments or raising capital.
The cost for the webinar is $100. We will limit attendance to 20 persons.

THIS IS AN ONLINE WEBINAR. DETAILS SENT AFTER REGISTRATION. See: opportunityzones.eventbrite.com

Wednesday, July 29, 2009

The Future of Public Housing (Hsiu Jui Chang, William Cunningham, Jui Kai Li)

On July 29th, the Subcommittee on Housing and Community Opportunity held a hearing on Academic Perspectives on the Future of Public Housing. Testifying were Dr. Thomas D. Boston, Professor, School of Economics, Georgia Institute of Technology, Orlando Cabrera, Chief Executive Officer, National Community Renaissance and Nixon Peabody, Dr. James Fraser, Associate Professor, Department of Human and Organizational Development, Vanderbilt University, Dr. Edward Goetz, Director, Center for Urban and Regional Affairs, University of Minnesota, Dr. Laura Harris, Assistant Professor, School of Urban Affairs and Public Policy, University of Memphis, Mr. David R. Jones, President and Chief Executive Officer, Community Service Society of New York, Dr. Mark Joseph, Assistant Professor, Mandel School of Applied Social Sciences, Case Western Reserve University, and Dr. Susan Popkin, Director, Program on Neighborhoods and Youth Development, The Urban Institute.

In the opening statement, several representatives expressed their views on public housing. The chairwoman maintained that there are problems with public housing such as neglecting the needs of existing public housing residents and underfunding. Rep. Lynch noted the shortage of staff required to maintain the quality of public housing. One congressman said flexibility in public housing programs is important. Most of the testimony concerned the HOPE VI program. The testimony is summarized below and copies of the written statements are available at; http://www.house.gov/apps/list/hearing/financialsvcs_dem/hchr_072909.shtml.

Highlights from Testimony:

One recurring problem identified had to do with the screening process. People receiving public housing are selected by private sector agents who may unfairly restrict applicants’ access to public housing services by the imposition of irrelevant credit requirements. Industry representatives responded that credit guidelines served to protect investors’ interests. Social responsible investors might counter by pointing out that credit guidelines imposed on subprime mortgage borrowers were also supposed to protect investors’ interests. They did not do so leaving some to question their relevance and fairness.

In general, fully evaluating the benefit of a public investment by simply looking at returns to a narrow group of people is inappropriate. One of the suggested program improvements involved making sure that HOPE VI program participants did not experience increased isolation as a result of participating in the program. In the table below, we show the interaction between isolation and improved housing. Thus, the most likely program outcome is a decline in quality of life for program participants.



Housing

Isolation


No Change

Slightly Better

Much Better

No Change

Flat

Quality of Life improves

Quality of Life improves

Slightly Worse

Quality of Life declines

Quality of Life declines

Quality of Life improves

Much Worse

Quality of Life declines

Quality of Life declines

Quality of Life declines



Monday, April 27, 2009

Creative Investment studies community development and minority-owned financial institutions for PG&E



Washington, D.C. — Creative Investment Research, Inc. announced that it has provided to Pacific Gas & Electric Company current, up to date social and financial credit ratings covering community development banks serving areas of high social need within PG&E’s service territory. PG&E has made FDIC-insured deposits in fifteen minority and community based institutions. The Community Investment Program (CIP) positively reflects the company’s values and has been undertaken as part of PG&E’s continuing effort to be responsive to the needs in communities it serves. The portfolio has a 90 day maturity. Performance data for the portfolio, relative to investing alternatives, is outlined above.