Opportunity Zones: A Promising Tool for Boosting Housing in Underserved Communities

As the housing affordability crisis deepens across the U.S., policymakers and investors are looking for creative ways to increase supply especially in places often overlooked by traditional development. One strategy gaining traction: Opportunity Zones.

Established under the 2017 Tax Cuts and Jobs Act, Opportunity Zones were designed to drive long-term investment into economically struggling neighborhoods. In exchange for putting capital gains into projects within these designated areas, investors receive significant tax benefits particularly if they hold the investment for a decade or longer.

Ross Baird, CEO of Blueprint Local, recently emphasized the program’s growing impact on the housing market in a commentary on TheHill.com. He argues that while much of the national housing conversation centers around costs and regulation, Opportunity Zones quietly offer an efficient, cost-effective way to bring new homes to areas in need.

“Opportunity Zones are bringing development to communities that rarely receive private investment and they’re doing it at a fraction of the public cost,” Baird noted.

Housing Growth in Hard-to-Reach Areas

According to recent analysis from ATTOM Data Solutions, 3,558 Opportunity Zones across the U.S. were studied, each with at least five home sales in the first quarter of 2025. The findings? Nearly half 48% saw increases in median home prices between the fourth quarter of 2024 and the start of 2025. This suggests that property demand and values are rising in these zones, signaling investor interest and neighborhood momentum.

Baird points out that 23% of all new housing currently under construction is located in Opportunity Zones. These projects aren’t limited to major metro areas either. Cities like Austin are benefiting from increased supply that helps ease pressure on rents, while smaller markets like Erie, Pennsylvania, have seen more than $100 million invested into revitalizing their core downtown districts.

What’s Ahead: A Renewed Focus on Rural America

As part of a broader policy proposal called the “One Big Beautiful Bill,” a new version of the Qualified Opportunity Zone (QOZ) program is expected to launch on January 1, 2027, and run through 2033. This updated program aims to extend tax incentives while narrowing eligibility rules to focus more specifically on rural and underserved communities.

Key elements of the revised plan include:

• Prioritizing rural census tracts
• Reserving at least one-third of new QOZ designations for rural areas
• Continuing deferred capital gains tax benefits for qualifying investments

This rural focus is especially relevant, as many of these communities face stagnant development, aging housing stock, and limited access to funding. Directing private capital into these regions could accelerate housing availability while creating jobs and revitalizing local economies.

More Homes for Less Money

Beyond helping solve the housing shortage, Opportunity Zones also offer financial efficiency. Traditional government-subsidized housing developments can cost taxpayers up to $1 million per unit. By contrast, Opportunity Zone developments typically come in at about $26,000 per unit in taxpayer cost.

“Opportunity Zones don’t rely on large subsidies or lengthy approval pipelines,” Baird explained. “They tap into private capital and get projects moving more quickly and more affordably.”

A striking comparison came from a Washington Post report highlighting a public housing development with a per-unit cost of $1.2 million and no in-unit washers or dryers. In contrast, Opportunity Zone-backed projects often deliver faster results with more practical amenities at a lower price. For more information about finance visit Nadlan Capital Group.