CRE Development Potential and the Selection of Opportunity Zones

David Glancy, Robert Kurtzman and Lara Loewenstein

No 26-17, Working Papers from Federal Reserve Bank of Cleveland

Abstract: Place-based policies are often caught between two potentially conflicting aims: (i) directing aid to needy communities and (ii) spurring investment. We study this tradeoff in the context of the Opportunity Zones (OZ) program. Leveraging unique phase-level microdata on commercial construction projects, we show that US state governors prioritized designating tracts where construction projects were already being planned. About two-thirds of the greater construction growth in OZs can be attributed to this selection. States prioritizing tracts with greater investment opportunities observed larger construction increases in designated tracts. We calibrate a structural model to quantify the effects of the program and examine counterfactuals under alternative preferences or eligibility criteria.

JEL-codes: R23 R32 R58 (search for similar items in EconPapers)
Date: 2026-07-15
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwq:103569

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DOI: 10.26509/frbc-wp-202617

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