April 1, 2019
With the federal government designating 8,700 census tracts nationally as Opportunity Zones, the next question is, where will be the best location for Qualified Opportunity Funds to invest in? Commercial Café sought to answer this question by researching the various tracts open for investment. The result is a study that offers the top counties for Opportunity Zone investments.
From the state perspective, California, Georgia and Texas had the most distressed neighborhoods as Opportunity Zones. And, among those states, Travis County, TX and Sacramento County, CA ended up being the top two counties for Opportunity Zone investment.
When it came to Travis County, the analysts commented that population growth, along with 21 opportunity zones and a 12% poverty rate (lower than the national average), makes this area attractive for potential investment. Austin is the county seat for Travis County. Meanwhile, California and Texas are among the highest-ranked in the number of Opportunity Zones open to investors, with 679 and 628, respectively.
On the negative side, however, both states rank low for infrastructure. Texas scored low because of poor wastewater and flood control facilities; while California received a low grade because of the condition of its roads, bridges and transit. The report pointed out that infrastructure is important for overall economic function and effective positioning of private capital. In addition, “risk-averse investors will be eyeing counties that are already considering large-scale spending packages for their energy, transportation and communications infrastructure.”
In conducting the study, Commercial Café eliminated unincorporated areas, the state of Alaska and counties with less than five Opportunity Zones. Then, armed with this list (and deleting other areas with incomplete data), the researchers tapped into the U.S. Census Bureau for population growth, poverty rates and population, while relying on the Bureau of Labor Statistics and Bureau of Economic Analysis to focus on employment and GDP growth.
Pictured: Austin, TX, county seat for Travis County
For comments, questions or concerns, please contact Amy Sorter