Rural census tracts designated as federal opportunity zones attracted an average of just $7.3 million in investment between 2018 and 2024, compared to $23.3 million for the typical nonrural zone, according to a June paper by the Treasury Department's Office of Tax Analysis. The program, launched eight years ago to channel capital into low-income communities through tax breaks, has generated $112 billion in total investment nationwide — but only 16% of opportunity zone property sits in rural areas, even though they represent 38% of all 8,764 designated zones.
Multiple county officials interviewed by NOTUS said they weren't even aware their areas had been designated as opportunity zones. Mike Plunkett, a coordinator in Montgomery County, Illinois, whose job involves attracting investment dollars, reported receiving only a single inquiry about the program — from a construction equipment maker that eventually opened a facility there. A rural county treasurer in Illinois, speaking anonymously, told NOTUS the article marked the first time they'd heard of the initiative. Local economic development leaders across the country said the incentives weren't effectively promoted, and that developers need workshops explaining how to use the tax breaks. One Mississippi planning director noted that his county has ample land and needs more housing, but local builders lack the information required to take advantage of the program.
The program allows investors to put capital gains from stocks or real estate into funds backing projects in low-income tracts, deferring and reducing their tax bills in return. After a decade, gains on the opportunity zone investment itself become completely tax-free. Starting in January 2027, a budget reconciliation law passed last year will offer investors in newly created rural opportunity zone funds a 30% cut in their capital gains tax bill after five years, compared to 10% for nonrural zones. The same legislation mandates that investors begin reporting residential units held and full-time workers employed, and allocates $15 million for Treasury to produce annual reports tracking housing and job creation — data that currently doesn't exist in any comprehensive federal system.
Outside research has produced mixed conclusions about the program's effectiveness. One paper from the Economic Innovation Group credits opportunity zones with spurring construction of 416,000 new homes. A National Bureau of Economic Research study found the zones created jobs, but most went to residents from wealthier areas outside the designated tracts. A third analysis by economists Naomi Feldman and Kevin Corinth determined the program had no meaningful effect on commercial investment or business activity. Jared Bernstein, who served as chief economic adviser to President Joe Biden and co-authored the original 2015 proposal for opportunity zones, told NOTUS that the program "can be either a useful way to channel investment to places that really need it or a tax shelter with high abuse potential," with tracking and evaluation as the deciding factor.
Rural counties face structural disadvantages that urban competitors don't. They can't offer dense populations to fill apartment towers and office buildings, or the transit networks to support major construction. They typically lack the large economic development teams with extensive resources that cities deploy to court investors. With limited staff and few established local investors, county leaders said drawing opportunity zone dollars will require an unprecedented push by local planners to learn the program and pitch their communities to developers — work that isn't happening now. Even in Washington, D.C., which has pulled in $1.2 billion in opportunity zone investment, the mayor's office cobbles together impact assessments through building permits and conversations with developers rather than systematic data. The second round of opportunity zone nominations is currently underway at Treasury, with new tracts becoming eligible for tax-incentivized investments starting in January 2027.