CNN, June 14, 2019: A ‘mind boggling’ tax break was meant to help the poor. But trendy areas are winning too
A plywood fence hides what remains of a small daycare center, coffee shop and auto body place that were demolished last month at 6th and Hobart Street in Koreatown, one of Los Angeles’ fastest-developing neighborhoods.
It’s a few blocks from the sleek Line hotel and just off busy Wilshire Boulevard, a strip dotted with luxury apartment complexes and construction work on a new subway line. The site is slated to become a Hyatt Centric hotel — and if all goes according to plan, it will also save its investors a tidy sum because of a massive new tax incentive program born from President Donald Trump’s Tax Cuts and Jobs Act a year and a half ago.
That law made it substantially cheaper to back either real estate projects or operating businesses in one of 8,764 low-income, high-poverty census tracts across the country that have been designated “Opportunity Zones.” One in ten Americans now live in one of the zones, which were chosen by state governors out of the thousands of eligible tracts; they span downtowns, rural areas and desperately poor neighborhoods — as well as upscale urban playgrounds.
