As Opportunity Zone activity accelerates, Philadelphia provides new perspective on recent investments
Across all Opportunity Zone tracts, the city saw $3.10 in private development for every public dollar.
April 16, 2019
- Expanding on last week’s analysis of select Opportunity Zone tracts, these analyses group all of Philadelphia’s 82 census tracts into quartiles based on median income and measure total public and private investment levels between 2012 and 2017. Across all Opportunity Zone tracts, the city saw $3.10 in private development for every public dollar, but results looked significantly different across income groupings.
- High and lower middle income tracts experienced $3.62 and $3.74 in private development activity respectively for every public dollar spent. The lowest income tracts saw 16 times as much private investment as public. Upper middle tracts saw negative returns: the private market invested only 63 cents per public dollar over those years.
- In aggregate, the city tabulates nearly $8 billion in investment in Opportunity Zone tracts over the five-year period, more than three quarters of it private. If private market stimulation is the measure of sound public investment, then the aggregate statistics of these O.Z. tracts suggest that public expenditures have been sound. The devil lies in the details: the type and scale of investment varies across tracts, and that will continue to be true as the O.Z. legislation translates into physical construction. As these areas benefit from additional federal incentives, a question will be how the city can redirect its spending to catalyze growth in neighborhoods outside of the zones.
Source: JLL Research, City of Philadelphia