Opportunity Zones Could Be a Mixed Bag in Gallup
By Vince Gallagher Native American Initiative Program Associate, Enterprise Community Partners
In April 2018, Governor Martinez nominated 63 census tracts in New Mexico to become Qualified Opportunity Zones, including Gallup. The idea is to encourage direct investment to lowerincome areas across the state and country—now designated as Opportunity Zones—by offering a new federal tax incentive. Opportunity Zones became law as part of the massive tax bill that President Trump signed into law at the end of 2017. Investors bringing capital to Opportunity Zones can receive a series of tax benefits, with greater benefits to those who keep their money longer in these low-income census tracts. Opportunity Funds—the vehicle that aggregates and deploys investor capital—could help address many of the challenges facing Gallup, including high rates of poverty, alcoholism, homelessness, and violence.
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April 2019
The legislation authorizing Opportunity Zones allows investors to work on a broad range of activities, such as affordable housing, healthcare facilities, and healthy food options—all of which would benefit residents of Gallup and the surrounding communities. But this incentive is only that: an incentive for investors to support much-needed development. Investors are not required to bring capital to any of the country’s 8,700 Opportunity Zones. That leaves communities like Gallup facing a serious threat: continued disinvestment. Opportunity Zones have a role to play in rural communities but should not be treated as a panacea for decades of disinvestment. Gallup will be competing for private investments against thousands of other census tracts that, in many cases, will offer investors faster and more attractive returns. In fact, early indications are that significant amounts of Opportunity Fund activity will be focused on the coasts. Areas like Gallup clearly face major challenges to create
