A majority of respondents to Bisnow's recent survey on qualified opportunity zone businesses believe the program will attract more businesses or startups to opportunity zones.

Twenty-four of 25 respondents, or about 96%, said the QOZB program would drive entrepreneurs to create QOZB businesses to the 8,700 designated opportunity zones.

“I think [the QOZBs] gives them a good incentive and helps them with future growth in areas that need to have the investments,” one participant said in the anonymous survey.

However, the QOZB program is not one-size-fits-all. The labor pool and location will ultimately decide where a business locates, survey participants said. Only 53% of survey participants believe it could become a catalyst and spur more business and commercial development in an opportunity zone area.

The QOZB is a component of the opportunity zone program that was passed as part of the Tax Cuts and Jobs Act in 2017. The program is a federal initiative aimed at spurring economic development through commercial real estate and business investments in areas with low-income census tracts.

If a business meets certain criteria, the owner — through a qualified opportunity zone fund — could set up a startup or operate a business in any of the designated areas nationwide in exchange for certain tax benefits that include the deferment, reduction or elimination of capital gains tax upon the sale of the business.

The commercial real estate aspect of the program has generated investment and praise, but also stoked concerns about gentrification and displacement from some politicians and neighborhood groups.

Few are taking advantage of the QOZBs but many experts believe that will change since the IRS and Treasury Department clarified rules surrounding the program earlier this year. The few investors that are looking into the program see a potential of creating tech incubators and reaping dynamic returns.

Survey respondents said hindering the QOZB component of the program is the lack of awareness and understanding of the program. “No one seems to be certain that the benefits will stay and many do not know enough about QOZBs to educate or assist,” one respondent said.

Another respondent said there’s a lack of knowledge on the topic, and pointed out there is a 10-plus-year hold to receive the full benefit of the program.

The survey found only 65% of respondents believe investors will actually roll over their capital gains into a QOZB. Other issues with the QOZB program are the lack of educated labor in some of these designated zones.

About 50% of the respondents believe that lack of labor is one of the disadvantages of the program. Another 20% of respondents said adding these types of QOZBs in an area could further gentrify an area.

But the benefits might outweigh some of the disadvantages. Ninety percent of respondents would like to see tech startups in these zones. Only 8% would like to see other types of businesses, including hospitality, warehouse, office and retail.

“Small biz is the backbone of the American and global economy,” a respondent said. “More young entrepreneurs will increase innovation and creativity in our society and most importantly, they will provide a sustainable environment and businesses for our future generations.”

Another participant said this program, if done correctly, could have a transformative impact on a community. “Smart accountants, lawyers, brokers, developers, advisers will encourage companies to set up in OZs as the benefits are significant from both a wealth creation dynamic and from a transformative impact it can have on local communities,” the survey participant said.