New York legislators voted in the FY 2021-22 budget to stop providing state and city tax breaks to real estate developers investing in Trump-touted federal “Opportunity Zones.” The widely covered “OZ” program is viewed by watchdog groups and economists as a wasteful boondoggle.
The passage of the legislation comes after two years of advocacy for the Opportunity Zones Tax Break Elimination Act (Gianaris/Dinowitz). Senator Gianaris first introduced the Act in 2019 in conjunction with a Reinvent Albany-led campaign to build support for the bill, which included a memo of support signed by twenty organizations and six unions, with forty Senators and Assemblymembers cosponsoring the legislation.
Enactment of the legislation could save New York State and NYC billions of dollars over the next few decades. Citizens Budget Commission estimates that the program was costing New York State and City up to $63 million and $31 million a year respectively. In 2029, the costs were expected to rise to $284 million and $140 million.
New York is now the fifth state to disconnect its tax code from the program. Coverage in ProPublica, the New York Times, and countless other outlets has revealed that the Opportunity Zone program largely benefits real estate and the well-connected. Investors with real estate in OZs included Trump allies such as Jared Kushner and Richard LeFrak, and OZ properties included superyacht marinas and luxury apartments with pet spas.
The bill passed in Part DDD of the Revenue bill (S2509-C/A3009-C).
Here is some of Reinvent Albany’s previous writing on Opportunity Zones:
- New Research Confirms Old Research: OZs Are a Boondoggle
- 19 Organizations, 6 Unions Ask NYS to Stop Subsidizing “Opportunity Zone” Boondoggle
- Testimony to Legislature on Economic Development