GAO Finds Effects of Original Opportunity Zones Largely Unknown Despite $108 Billion in Funds

The effects of the original federal Opportunity Zones tax break are still “mostly unknown,” even though funds using the incentive held more than $108 billion in assets by the end of 2024, according to a Government Accountability Office report released Monday.

That data gap matters more now because Congress made the program permanent in 2025 while revising it. In its new report, GAO said those changes may improve how the incentive is aimed and how its results are tracked, addressing a central weakness of the first version.

Opportunity Zones are low-income census tracts nominated by governors and designated by the Treasury Department. Congress created the incentive in the 2017 Tax Cuts and Jobs Act to steer private capital into distressed communities through Qualified Opportunity Funds, which give investors tax benefits, including deferral of taxes on invested capital gains.

GAO’s Aug. 24 report, titled “Opportunity Zones: Effects of Original Tax Incentive Mostly Unknown and Revised Incentive May Offer Improvements,” found that the zones selected under the original program generally had lower incomes and higher poverty rates than other census tracts. But it said the government still has limited evidence on what the program actually did for those communities.

A key reason is that the original law did not require Qualified Opportunity Funds to publicly report detailed information about their investments. Without that data, GAO said, policymakers and the public have had only a limited ability to assess what kinds of projects were financed and whether they changed local economic outcomes.

That uncertainty has persisted even as the program grew. Citing Internal Revenue Service data, GAO said Qualified Opportunity Funds held more than $108 billion in assets at the end of 2024.

Based on interviews and surveys, GAO found the incentive has primarily financed real estate development, especially multifamily rental housing. Stakeholders told the watchdog that investment has tended to flow to urban tracts that already had infrastructure and community support in place, raising the longstanding question of whether the tax break changed investment decisions or mainly benefited projects likely to move forward anyway.

State officials were often unsure how much local communities had gained. GAO surveyed all 50 states, Washington, D.C., and five U.S. territories, and found states were mostly uncertain about the effects of Opportunity Zone investment on local outcomes. About 20% reported seeing increased job creation and housing.

Congress revised the program in July 2025 through the law commonly known as the One Big Beautiful Bill Act. GAO said the new law leaves fewer census tracts eligible for future Opportunity Zone designation, a change that some states and other specialists said could help target the incentive more closely to the most economically distressed areas.

The law also created a separate rural Opportunity Zone category with different potential tax benefits. Stakeholders told GAO that change could draw more investment to rural communities, though they were uncertain by how much.

Just as significant, GAO said, the revised law added new reporting requirements for funds and for Treasury. Those provisions may make it easier to track investment characteristics and potential community effects in the next phase of the program. GAO also said the added time states now have to prepare nominations for the next round of zones could help them make more informed selections.

The report lands at a pivotal moment for the policy. Congress has already committed to a permanent version of Opportunity Zones, but GAO’s findings show that decision was made without solid evidence about what the original version accomplished.

For the report, GAO analyzed Census data, reviewed a nongeneralizable sample of 16 Qualified Opportunity Funds, conducted site visits tied to seven selected funds, surveyed states and territories, and interviewed fund representatives, state officials, specialists and federal agencies.