Although all opportunity zones must meet certain requirements to be designated as such, not all opportunity zones are created equal.
The designation was developed as part of the Tax Cuts and Jobs Act of 2017 in order to encourage investment in economically distressed communities, but the data used to qualify these areas (poverty rate, median income, etc.) do not necessarily speak to their growth potential. In other words, each of these communities will undoubtedly benefit from private investment, but it's difficult to say whether investors will benefit by choosing an opportunity zone based merely on the virtue of its designation.
As an inroad to exploring these opportunities further, we looked at Census tracts qualified as opportunity zones that were already showing positive signs of growth in 2018. Since outmigration is a strong indicator of depressed communities that are struggling to turn around, we started by looking at Census tracts with the highest population gains from 2014 to 2018.
In addition to population growth, we also analyzed Census tracts with the fastest rising household incomes over the same period and developed an index with these two variables to find the fastest growing opportunity zones in the country.
The Fastest Growing Opportunity Zones in the U.S.
1. Census Tract 115: Pennington County, South Dakota
- Population Growth: 337%
- Household Income Growth: 168%
- COVID-19 Employment Impact: Low