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Ohio State University Extension


Ohio Opportunity Zones in Community and Economic Development

Community Development
Gwynn Stewart, MS, Community Development Educator IV, Ohio State University Extension, Noble County
Nancy Bowen-Ellzey, CEcD, Associate Professor and Extension Field Specialist, Community Economics, Ohio State University Extension
Kenzie Johnston, Educator, Community Development/Agriculture and Natural Resources, Ohio State University Extension, Delaware County

This fact sheet is intended as a guide for community planners, economic development professionals, elected officials, extension professionals, and investors interested in place-based development in opportunity zones (OZs). It provides background information on OZs and details about the Ohio-specific tax options.

The Investment in Opportunity Act was added to the Internal Revenue Code with passage of the Tax Cuts and Jobs Act, a federal tax bill enacted in December 2017. This new tax incentive legislation enabled states to participate by designating OZs in low-income areas targeted for reinvestment. OZs are designed to provide incentives to private investors to consider under-invested, economically distressed communities (Atkinson 2018).

Ohio adds a complementary income tax credit with the federal incentive to encourage local investment. “In total, over 350 entities invested in at least 215 distinct developments or businesses across 72 census tracts and 18 counties, with the median investor contributing $201,460” (Fikri, Lettieri, and Newman 2021).

What Is an Opportunity Zone?

Created under the Tax Cuts and Jobs Act of 2017 (Public Law No. 115-97), qualified OZs are defined by the Internal Revenue Code (Internal Revenue Service 2021).

Opportunity zones are low-income census tracts that were nominated by state governors and certified by the U.S. Treasury. The program is not grant money; it is private sector driven through investors who save on capital gains through tax deferrals. The Investing in Opportunity Act’s goal is to drive focused investments into low-income communities. “Low-income community” is defined in Section 45D(e) of the Internal Revenue Code. It identifies the factors needed to classify a population census tract as low-income:

  1. the poverty rate for such tract is at least 20 percent
  2. (i.) in the case of a tract not located within a metropolitan area, the median family income for such tract does not exceed 80 percent of statewide median family income

(ii.) in the case of a tract located within a metropolitan area, the median family income for such tract does not exceed 80 percent of the greater of statewide median family income or the metropolitan area median family income
(Internal Revenue Code 1986)

There are a few caveats to this definition that deal with targeted populations, areas not located within census tracts, low-population tracts, and high-migration rural communities, which are explained in more detail in the code (Atkinson 2018). The Internal Revenue Service (IRS) confirms that the boundaries of designated qualified OZs were established at the time they were designated in 2018 by using 2010 decennial census tracts. The OZs are unaffected by any 2020 decennial census changes (ODOD 2022).

What Is the History of Opportunity Zones?

While OZs were enacted in 2017, they were not designated until mid-2018, and capital started to be deployed at scale only in 2020 (Fikri, Lettieri, and Newman 2021). The COVID-19 pandemic however, slowed investment everywhere in 2020, including in OZs (The Council of Economic Advisers 2020).

Not every state took the same approach to nominating areas for OZs. Many states “selected places in need that had the potential to attract investment” (The Council of Economic Advisers 2020). In 2018, the U.S. Treasury and IRS certified 8,764 census tracts as qualified opportunity zones. These zones are in all 50 states, the District of Columbia, Puerto Rico and all five inhabited U.S. overseas territories (Atkinson 2018).

How Were Opportunity Zones Determined?

In 2017, governors across the nation helped establish the national OZ program by recommending eligible census tracts in their states to the U.S. Treasury Department. This process certified the OZ census tracts to provide eligibility for a substantial federal capital gains deferral on projects through qualified opportunity funds. The zone designations are effective until December 31, 2028. (Atkinson 2018).

State governors used individualized analytics, local input from mayors and county officials, existing policy initiatives, and other qualitative factors to determine OZ census tracts. The selection process allowed a wide variety of communities and economic areas to become OZs (Fikri and Lettieri 2018).

Certified OZs have an average poverty rate of nearly 31 percent. This percentage is well above the 20 percent eligibility threshold. They also have an average median family income of only 59 percent of the OZ area's median, compared to the 80 percent eligibility threshold. But these zones may well be positioned to succeed economically, as they contain 24 million jobs and 1.6 million places of business (Robinson 2018).

Map of continental United States displaying highlighted areas that represent opportunity zones.

Table 1. What Is Unique About Ohio's OZ Program?
Location Designated Opportunity Zones 320
Low-Income Tracts 317
Non-Licensed Continuous Tracts 3





“One in three Ohioans (34.5%) living in an OZ fall below the federal poverty level and are also more racially and ethnically diverse.” The poverty and diversity selections rates tend to show that these tracts were chosen with the vision to grow investment in areas that have been more disadvantaged and also had disinvestment (Keithley 2019).

A map of the Ohio zones can also be found online at

After designation by the U.S. Department of Treasury, the 320 Ohio OZs engaged communities, potential project owners, and economic development organizations to provide opportunities to investors interested in taking advantage of the zone’s tax benefits.

Ohio’s Opportunity Zones Tax Credit Program provides a unique taxpayer incentive that protects investments in economically distressed areas. “The Ohio OZ tax credit is applied to the individual income tax, as outlined in the Ohio Revised Code Section 5747.02. The tax credit may be claimed for the taxpayer’s qualifying taxable year or the next consecutive taxable year.” Taxpayers who have invested in an Ohio Qualified Opportunity Fund (QOF) can apply to the Ohio Department of Development for the tax credit during the annual application period in January (ODOD 2022).

Recent analysis of administrative data from Ohio shows that, at a minimum, 22.5% of Ohio’s zones have received an estimated $453.4 million in investments that were eligible for both federal and state tax incentives ( Fikri, Lettieri, and Newman 2021).

  • One in 12 (955,613) Ohioans live in an opportunity zone (Keithley 2019).
  • Three of Ohio’s largest counties have 92% of the OZ investment funding (Fikri, Lettieri, and Newman 2021).
  • The average percent of poverty in Ohio-invested opportunity zones is 35% (Keithley 2019).
  • Ohio recommended 320 tracts—25% of its eligible 1,280 tracts (ODOD 2022).
  • In Ohio, opportunity zones are available in large cities, small communities, and Appalachian counties (ODOD 2022).Red graphic of the state of Ohio.

How Do Investors Save?

Opportunity funds allow investors to pool their resources in OZs, increasing the scale of investments serving underserved areas. Opportunity funds use the capital invested to make equity investments in businesses and real estate in opportunity zones (ODOD 2022).

Opportunity zones provide these tax benefits:

  • deferral of capital gains invested in qualified opportunity funds until December 31, 2026
  • a 15% step-up in basis of capital gains invested in qualified opportunity funds
  • zero federal tax owed on capital gains from qualified opportunity fund investments
    (Atkinson 2018)

Opportunity zone property can be either an OZ business or OZ business property. According to Atkinson (2018), “a qualified opportunity fund can:

  • invest in OZ businesses that hold tangible property located within opportunity zones
  • become an OZ business by investing directly in tangible property located within opportunity zones.”

Where Is the Opportunity Zone Investment Activity?

While there is currently no comprehensive public directory of OZ investments, trends show high-impact investments in rural areas and in markets, such as:

  • affordable housing
  • brownfield redevelopments
  • clean technologies
  • healthcare
  • historic preservation
    (Fikri, Lettieri, and Newman 2021)

The Ohio Opportunity Zones website also has a downloadable Ohio Opportunity Zone list at


Opportunity zone investments are designed to help distressed communities utilize vacant areas, repurpose properties, and refurbish others toward progress. Through cooperative leadership, communities are pairing local needs with projects and investors to yield new opportunities.

In Ohio, there are 320 tracts spread across 73 of its 88 counties. Data available for 2020 and 2021 show 22.5% of Ohio’s zones have received an estimated $453.4 million in investments, taking advantage of both the federal and state incentives (Fikri, Lettieri, and Newman 2021).


Eastman, Scott, and Nicole Kaeding. 2019. “Opportunity Zones: What We Know and What We Don’t.” Fiscal Fact No. 630, Tax Foundation. PDF.

Patton, Wendy, and Michael Leonard. 2018. "Assessing Opportunity Zones in Ohio." Policy Matters Ohio.

Tokle, Kathryn. 2019. "Opportunity Zones' Biggest Myths." Forbes, May 29, 2019.


Atkinson, Jimmy. 2018. "The Beginner’s Guide to Opportunity Zones.” The Opportunity Zones Database.

The Council of Economic Advisers. 2020. “The Impact of Opportunity Zones: An Initial Assessment.” Washington D.C: Executive Office of the President. PDF.

Fikri, Kenan, and John Lettieri. 2018. “The State of Socioeconomic Need and Community Change in Opportunity Zones.” Economic Innovation Group. PDF.

Fikri, Kenan, John Lettieri, and Daniel Newman. 2021. “Opportunity Zones State of the Marketplace.” Economic Innovation Group. PDF.

HUD (U.S. Department of Housing and Urban Development). n.d. Map of Opportunity Zones. Opportunity Now. Accessed June 3, 2022.

Internal Revenue Code. 1986. New Markets Tax Credit § 45D(e), Low-income Community. PDF.

Internal Revenue Service. 2021. Opportunity Zones (web page). Reviewed or updated November 10, 2021.

Keithley, Devin. 2019. “Opportunity Zones: Targeting Investment in Ohio’s Most Distressed Communities,” Stories of Home (blog), Ohio Housing Finance Agency, August 14, 2019,

Newman, Daniel, and Kenan Fikri. 2021. "A First-of-Its-Kind Exploration of Ohio’s Opportunity Zone Investments." Economic Innovation Group.

ODOD (Ohio Department of Development). 2022. Ohio Opportunity Zones Tax Credit Program. Columbus: OH.

Robinson, David. 2018. "5 Strategies to Prepare Opportunity Zones for Development." The Association for Economic Development Professionals.

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Originally posted Jul 21, 2022.