By Nyesha Stone
When our people weren’t allowed into certain universities, we created are own. But, fast forward, a majority of Historically Black College Universities (HBCUS) are located in low-income communities, and lack the opportunity to gain big investors. But times are changing.
Last year, Congress established a section in The Tax Cuts and Jobs Act that allows taxpayers to take advantage of Opportunity Funds. The goal of the investment is to encourage direct resources to low-income communities—known as Qualified Opportunity Zones—through a more market-driven strategy.
Through these investments, low-income communities can gain opportunities such as a grocery store in a food dessert, medical offices and restaurants. The funds are meant to push investors to invest in areas they tend to ignore or are hesitant about.
According to Accounting Today, there are three tax incentives for investors: “Deferral of capital gain; Possible reduction of the amount of gain realized through a basis adjustment; and, Possible permanent exclusion of gain on the appreciation for the interest in a Qualified Opportunity Fund.”
Half of the country’s HBCUs and a majority of Black communities are located within the 8,700 federally designated zones, according to a press release. With this opportunity, the HBCU Community Development Action Coalition (CDAC) established the first HBCU-focused Opportunity Fund to jump-start reinvestment in and around HBCUs through The Renaissance HBCU Opportunity Fund.
Ron Butler, president of the HBCU CDAC, said the opportunity zones can be whatever the community wants.
“Everything we do as a collation starts with the community,” said Butler. “It’s all about the community and the campus.”
Butler remembers attending Howard in his younger days and not having the option to go get a cup of coffee or even a slice of pizza. But with funding, the opportunities of what is on and around campus is endless.
“It’s really a major effort to attract a big capital to underserved communities,” Butler said about the potential impact the Fund may have.
According to a press release, the Fund has been selected to receive support from the Kresge and Rockefeller Foundations through the Opportunity Zones Incubator. It will provide technical assistance to help get the Fund to market.
The Fund was made possible from the partnership between the HBCU CDC and Renaissance Equity Partners, which will pursue mixed-use projects that will attract business and create workforce housing opportunities targeted to junior faculty, staff, graduate students, and military veterans with GI Bill benefits, which was also stated in the press release.
To find out more about opportunity zones visit https://www.cdfifund.gov/Pages/Opportunity-Zones.aspx