PUBLIC-PRIVATE PARTNERSHIP TO SPUR OPPORTUNITY ZONE INVESTMENT
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Can Opportunity Zones help or hurt in our efforts to rebuild from the ground up some of our most disenfranchised communities across America ?
serve as a means for private equity to benefit from taking risks in these areas and help close some of the gaping holes in our systems that government clearly could not fill on its own .
Some of the harshest critics of the QOZ have expressed their concerns that this is just another tax avoidance strategy that helps the rich get richer , and downplay the possibility that the incentive has the ability for municipalities to leverage both private and public resources to help achieve sustained community economic development that creates an ecosystem of jobs , housing and social and economic stability to communities that have been mired in poverty , crime and violence . In focusing solely on the potential financial benefit to the speculative investor , critics may be overlooking and minimizing the financial risk they assume and the possibility of benefiting from the catalytic upside potential and the positive net effect these same investments may accomplish in improving the quality of life , safety health , employment and housing for those very same communities . To realize that goal , it requires the pragmatic cooperation of all stakeholders to work together to ultimately align their respective interests in achieving a balanced and sustainable independent economic engine that also meets the fundamental goals of the community .
Stabilized communities typically provide the basic framework and conditions that often lead to a lasting positive impact which result in better safety , health and academic achievement , expanded workforce , larger tax base and reduced long-term government dependence .
QOZ legislation was a high stakes bipartisan bet passed to allow tax benefits to investors that can share in the risk of providing the necessary fuel needed to contribute to helping close the gaps and provide an additional funding mechanism for communities designated to need it the most . In the bestcase scenario , it can be the key to being able to design and implement a system that helps increase household incomes and tax revenue base and reducing across the board financial burden to government . Aggregated together , this could sum up to potentially matching , exceeding and even dwarfing the tax benefits that investors might gain for their investments and offsetting the waived lost revenue of any possible taxable capital gains government could have received .
THE POWER OF PUBLIC PRIVATE PARTNERSHIPS IN OPPORTUNITY ZONES
As a seasoned finance professional and social entrepreneur , with a history of investing and building a vertically integrated social and economic development model that includes behavioral healthcare services , social enterprises , and affordable housing real estate developments , we understand the challenges communities face where the risk is high and incentives are lacking . We also know the exponential good that strategic private / public partnership investments into the community can do . For almost 27 years , our team has created private / public partnerships with government , philanthropists , nonprofits , and investors to help build various facets of our comprehensive model that have a long track record of accomplishing many of the stated goals of the QOZ . During that time , our various investments have been mostly based and located in some of Chicago ’ s most distressed communities , today designated as QOZs .
Our approach has been focused on bringing precious mental and behavioral healthcare services , creating , and buying social enterprises , and building a portfolio of a network of attractive and affordable housing , senior housing , and veteran housing . Although conventional lenders , businesses , and real estate investors generally avoided the people , communities , and the markets we chose to invest in , we somehow managed to weave the funding necessary to make them work for all stakeholders ; especially for those living within the communities that now had access to treatment , jobs and housing . Justifiably , gentrification is a major concern for these communities , even we admit that in many cases as a result of our substantial investments , we have seen an increase in the local property values in these significantly depressed areas over the years ; however , in our experience it has been a good thing . In providing a vehicle for further economic development , we should consider the fact that a thoughtful approach has the ability to achieve the desired net positive effect of helping stabilize home values and bringing them closer to market rates also helps build the net worth of the people who own , live in and are now in a better position to improve and maintain those same properties for their tenants . In addition , it allows for now employed and upwardly mobile residents from those communities to have the choice and the ability to feel safe and want to live , work , and stay in their communities . This has the added benefit of enhancing , strengthening and anchoring the economic , social and cultural fabric of family , neighbors , and a sense of community .
HOW OPPORTUNITY ZONES CAN HELP COMMUNITIES
Properly embraced and executed by local governments , QOZs can provide a mechanism for attracting significant resources from strategic socially responsible and patient investors with a solid plan to work together to align their respective and common interests and resources to allow the private investors , and the public , to reap the mutually beneficial benefits of a successful investment for all stakeholders , including the investors , the local government , the community and taxpayers .
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