Gov. Daniel Malloy’s administration has nominated 17 opportunity zones across five Fairfield County municipalities as part of the federal government’s recently established Opportunity Zone Program, which aims to induce long-term investments in low-income communities.
“One of my administration’s top priorities has been the revitalization, reinvention and growth of our cities,” said Malloy, who nominated a total of 72 opportunity zones across 27 municipalities statewide. “These opportunity zone nominations we have made will go a long way in encouraging new investment and development in areas that will be critical to Connecticut’s future.”
The program provides a federal tax incentive for investors to re-invest unrealized capital gains into opportunity zones through opportunity funds. Under the terms of the program, the governor of each state must submit a plan to the federal government designating up to 25 percent of the qualified census tracts in their state as opportunity zones, which is then subject to approval of the Secretary of the Treasury.
“The 72 opportunity zones that we have nominated are ripe for redevelopment,” Commissioner Catherine Smith of the Department of Economic and Community Development, the state agency that is overseeing the process, said. “And we hope this designation will encourage new investments in these areas and spur economic growth.”
“Incentivizing developers to build affordable housing makes good economic sense and a diverse housing stock is key to attracting business and people of all ages,” added Department of Housing Commissioner Evonne M. Klein. “We’re already encouraging investment in our towns and cities and I’m confident these new designations will only help to expand on that progress.”
Qualified census tracts are those that have a poverty rate of at least 20 percent and a median income that does not exceed 80 percent of the area median income. The opportunity fund model encourages investors to pool their resources in opportunity zones, increasing the scale of investments going to underserved areas. The funds may seed new businesses, expand existing firms, or undertake real estate development.
Qualifying investments may include a broad range of commercial and residential investments, such as transit-oriented development, affordable housing and mixed-use development, and energy efficiency and renewable energy projects on public and private assets. In exchange for their investments, opportunity fund investors are able to decrease their federal tax burden through the preferential treatment of capital gains.
Malloy’s nominations include seven sites in Bridgeport, five in Stamford, three in Norwalk, and one each in Danbury and Stratford. An interactive map of all 27 nominated opportunity zones can be found here.