October 28, 2019
November 4, 2019
Bisnow Boston Readers Still Confused By Opportunity Zones, Mixed On Their Development Potential
There is still confusion over how to make the opportunity zone program work in Massachusetts, according to a Bisnow reader survey. But respondents are more certain that some opportunity zones in the Bay State are less worthy than others.
Seventy-three percent of the 30 respondents to Bisnow’s unscientific opportunity zone survey said guidelines are still confusing when it comes to pairing the opportunity zone program with state-level development incentives. Only 10% said the program is easier to understand thanks to the U.S. Department of the Treasury releasing a second set of guidelines in April.
When Gov. Charlie Baker’s administration released the list of 138 opportunity zones in Massachusetts in 2018, skeptics noted development hot spots like Alewife in West Cambridge and Somerville had been included in the program aimed at boosting economic development in low-income areas.
Cape Cod resort towns like Provincetown and Falmouth were on the list, which also includes Gateway Cities like Lowell and Fall River. Gateway Cities are former industrial hubs that have struggled economically in recent years due to companies moving manufacturing overseas.
Eighty-three percent of respondents to the survey said they felt there were parts of Massachusetts included in the opportunity zone program that shouldn't have been. Only a slight majority (56%) said they think the program will help low-income areas compared to 43% who said the OZ program is one of gentrification-inducing tax cuts.
Fifty-six percent of respondents also said they didn’t expect Cape Cod OZs to receive more developer attention than OZs in areas like Fall River and Leominster.
As for what kinds of developments seem likely in Massachusetts OZs, 46% of readers expect multifamily will be the most prominent asset class for developers in OZ tracts in places like Cape Cod and the Boston Harbor Islands. Thirty-six percent of readers anticipate multifamily development will be the project of choice for developers in OZs in places like Springfield, Worcester and the South Coast.
Six respondents expected industrial properties to do well in Springfield, Worcester and South Coast OZs while only two people said office projects would gain traction in those OZs. No respondents thought office or industrial projects will get proposed for the Cape Cod and Boston Harbor Islands opportunity zones.
Most of the people surveyed (63%) expect only a moderate level of development to take off in Massachusetts opportunity zones compared to 20% who expect minimal development and 13% who said an opportunity zone designation would spark a development boom.
If there is a development boom, it likely won't be spread evenly across the industry: Fifty-six percent said they weren’t planning to invest or develop in a Massachusetts OZ. Forty-three percent said they were.