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Investment Focus on Affordable Housing Expanding Among Opportunity Zone Fund Managers

Published on January 30, 2019

WASHINGTON, DC — The potential for billions of dollars in new investment in affordable housing through Opportunity Zones is growing, according to new analysis by the National Council of State Housing Agencies (NCSHA).

Of the 72 funds and $16 billion in planned investment included in the latest edition of NCSHA’s Opportunity Zone Fund Directory, nearly half ― 49 percent (35 funds) ― target community revitalization, including affordable or workforce housing. The directory includes nine new funds, and five of those anticipate investment in at least one of the community revitalization categories.

Opportunity Zone - OZ Fund Investment by Sector
Source: NCSHA Opportunity Zone Fund Directory, 4th Edition

The most common investment focus continues to be commercial real estate, with nearly 90 percent (64 of 72 funds) reporting investment in multifamily residential, student housing, mixed-use, and hospitality development.

Forty-two percent of the funds (30 of 72) plan investment in economic development or small business development, and 18 percent (13 of 72) plan to focus on infrastructure or renewable energy investment. Most funds report investment focus in multiple categories.

Geographic focus continues to be strongest in the Northeast and Mid-Atlantic region. However, six of the nine new funds specifically target Alabama, California, Oregon, Texas, and Washington State. Fund managers continue to be heavily focused on investment in larger urban areas.

Opportunity Zone OZ - Fund Investment by Region
Source: NCSHA Opportunity Zone Fund Directory, 4th Edition

The 72 funds featured in the directory range in size from $1 million to $3 billion and represent more than $16 billion in anticipated total investment.

Opportunity Zone - OZ - Fund Target Sizes
Source: NCSHA Opportunity Zone Fund Directory, 4th Edition

NCSHA’s analysis is based on a review of public information available on the 72 Qualified Opportunity Funds included in the fourth edition of its Opportunity Zone Fund Directory, released last week.

About the National Council of State Housing Agencies
For more than 50 years, state Housing Finance Agencies (HFAs) have played a central role in the nation’s affordable housing system, delivering financing to make possible the purchase, development, and rehabilitation of affordable homes and rental apartments for low- and middle-income households.

The National Council of State Housing Agencies (NCSHA) is a nonprofit, nonpartisan organization created to advance, through advocacy and education, the efforts of the nation’s state HFAs and their partners to provide affordable housing to those who need it. NCSHA’s vision: An affordably housed nation. Learn more at www.ncsha.org.

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