July 16, 2025
The bill to end New York’s Opportunity Zone tax credit didn’t pass — again. And while this might seem like a win for some in the real estate world, it’s also becoming harder to ignore the mounting criticism surrounding this federal program.
Originally created during the Trump administration, the Opportunity Zone incentive was pitched as a way to bring more affordable housing and business investments into low-income neighborhoods.
In reality, however, a growing pile of data suggests the program might be doing more to fuel market-rate development than help those actually in need of affordable options.
In fact, a study by NYU’s Furman Center found that about 60% of new apartments built using the credit in low-income areas were rented at market rate. No rent caps. No rental assistance. Just new units that technically fit the zip code requirement, but miss the mark when it comes to actually addressing housing affordability.
This puts small developers, investors, and brokers in an awkward spot. On one hand, programs like Opportunity Zones create incentives to build and invest — which we need, especially with NYC’s sky-high housing demand and record-low vacancy rates.
On the other, if the tax breaks primarily benefit luxury and upper-middle-class projects, are we really solving the problem?
The state Senate has supported repealing the credit year after year, but the Assembly hasn’t budged. Meanwhile, the cost of keeping this tax break alive? Up to $424 million in lost tax revenue annually — money that could be used for public transit, clean water, or other crucial services.
And with looming federal budget cuts threatening an additional $15 billion blow to the state’s finances, lawmakers will soon have to decide where the line is drawn between incentivizing growth and protecting the public good.
For brokers, investors, and developers working in or near these Opportunity Zones, this debate is more than just politics — it affects deal flow, project planning, and how we position ourselves in a market that’s under more scrutiny than ever.
Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
