The Federal Reserve Bank of New York’s Community Development Finance Initiative (CoDeFi) supports the transformation of low- and moderate-income communities in its region by working to increase the impact of community investments and by supporting inclusive economic development strategies. Passed as part of the Tax Cuts and Jobs Act of 2017, Opportunity Zones incentivize long-term private investment into underserved or distressed U.S. communities through significant capital gains tax offsets and deferrals for investors. CoDeFi tasked this SIPA Capstone team with developing a database of tools to help communities leverage Opportunity Zone investments to develop equitable and community-driven economic development strategies.
The SIPA team created three deliverables to CoDeFi:
- A digital database that compiles vetted tools, methods, and frameworks available organized for the community group end-user;
- Content for short- and long-form user guides to help community groups navigate the process; and
- Additional recommendations for how CoDeFi can support communities trying to access investment based on user interviews and research.
In addition to disseminating these tools, the SIPA team recommended that CoDeFi use its convening power to build the capacity of other stakeholders in the Opportunity Zone ecosystem—such as investors, anchor institutions, and foundations—and to increase transparency between investors and communities to ensure investments are going to the projects that are most beneficial to communities.