CRE Development Potential and the Selection of Opportunity Zones

David Glancy, Robert Kurtzman and Lara Loewenstein

Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

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.

Keywords: opportunity zones; commercial real estate; construction; time-to-plan (search for similar items in EconPapers)
JEL-codes: R23 R32 R58 (search for similar items in EconPapers)
Pages: 55 p.
Date: 2026-07-17
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Related works:
Working Paper: CRE Development Potential and the Selection of Opportunity Zones (2026)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:103646

DOI: 10.17016/FEDS.2026.056

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