New York Is Overloaded With Opportunity Zones Full Of Rich People
With its rapid gentrification, New York City — and Brooklyn in particular — has an outsized portion of the richest opportunity zones in the country.
Of the 8,700 census tracts designated as qualified opportunity zones in the Tax Cuts and Jobs Act in 2017, 50 had already experienced at least 7.5% increases in households making at least $200K per year since 2000 (adjusted for inflation), a new study by Webster Pacific found. A full 30% of those zones, or 15 total, are within New York City limits. The San Francisco Bay Area had the second-most among metro areas.
Though the opportunity zone legislation was meant to spur investment in low-income communities, its lack of restrictions on development and its reliance on 2010 census data have combined to give tax breaks to some areas that would have been desirable for investment without them. Community advocates worry that if such areas exist, potential investors will have less reason to venture into disadvantaged neighborhoods.
Webster Pacific chose to measure census tracts by growth of affluent families to get a sense of which neighborhoods would be most likely to see the sort of luxury apartments associated with the displacement of low-income families. Brooklyn, where that sort of turnover has happened faster than anywhere else in the country since the turn of the century, is home to 11 of the top 50 census tracts in that department.
A census tract within Gowanus topped the list with over 21% growth, while parts of North Williamsburg, Dumbo and Red Hook came in fourth place, sixth place and 12th place, respectively. Manhattan contains three of the census tracts in the top 50, and the Queens neighborhood of Long Island City was the location of the only other opportunity zone to make the cut.
While some areas, like top finisher Gowanus, saw such growth because they started with so few households with incomes greater than $200K, others had relatively high percentages of such families back in 2000. The opportunity zone in Long Island City had the highest starting percentage of the top 50, with 21.7% in 2000 and 30.1% in 2017.
One of the starkest examples of how little an opportunity zone designation can match with the reality on the ground is in the 10th finisher in Webster Pacific's list. Encompassing a section of southeastern University City in Philadelphia, the area is mostly covered by medical buildings and the University of Pennsylvania.
The FMC Tower, which contains some of the most expensive offices and apartments in the city, was completed within the University City census tract in 2016. Bordering the zone to the north is rail hub 30th Street Station and the site for a planned $5B megadevelopment called Schuylkill Yards by Drexel University and Brandywine Realty Trust, which was announced and initiated before opportunity zones were designated.
