Philadelphia – April 20, 2018 – New tools to spur investment in affordable housing, business start-ups and workforce redevelopment projects in North and Northwest Philadelphia may soon be available, according to state Sen. Art Haywood (D-Philadelphia/Montgomery).
Portions of Haywood’s district were nominated for inclusion in the new federal Qualified Opportunity Zone program. The areas cover parts of the 10th, 12th, 50th, 59th and 17th Wards. The neighborhoods include West Oak Lane, East Oak Lane, Mount Airy and East Germantown.
“In order to have comprehensive redevelopment we need to find ways to provide economic assistance to all areas, but we must also target resources to spur growth in specific neighborhoods,” Haywood said. “The areas that were nominated by the governor today for inclusion as Qualified Opportunity Zones may soon be able to use tax incentives to attract new investment.”
Qualified Opportunity Zones were created by federal law last December. The new law seeks to promote long-term investment in economically hard-hit areas. Gov. Tom Wolf submitted the 300 census tracks that were allotted for Pennsylvania under the law. All told, Pennsylvania has 1,197 census tracks that are eligible.
Private investors that make equity investments in funds which use that capital to generate economic action in real estate, business start-ups or other growth activities in a Qualified Opportunity Zone will receive favorable capital gains tax treatment.
“The idea behind the program is to tap into investors who are holding money but who are looking for new ways to use capital and generate tax relief,” Haywood said. “If this program is applied properly, the investor receives a tax benefit, but more importantly the economically struggling area is the beneficiary of investment.
“Creating jobs and economic development opportunities in the goal.”
The U.S. Treasury is now developing the program. The Internal Revenue Service will be providing further guidance to investors as the program is more fully developed. Final approval of the neighborhoods nominated for inclusion in the program is expected in May.