New York has a choice: Keep funding the Trump administration’s anti-affordability agenda, or remove New York from participating in Donald Trump’s Opportunity Zone tax break.
Last year, the Trump administration passed H.R.1, and its priorities were clear: more money for the mega-wealthy, less health care for those in need, cuts in SNAP funding. Included in the provisions was a permanent extension of the Opportunity Zone program, which allows uber-wealthy investors to get tax breaks for investing in luxury apartments and other investments across the country. Because New York mirrors the federal tax code, the state will start losing up to $284 million annually — unless the state ends its tax break.
Supporters contend that the program drives investment into low-income neighborhoods; there are 9,000 so-called Opportunity Zones across the country. But independent analyses have shown that the program primarily benefits luxury apartments: A review by the NYU Furman Center found that Opportunity Zone neighborhoods saw a large increase in upscale housing compared to neighborhoods outside the zones. And reporting by The New York Times has detailed how many of these apartments are properties with high-end perks like dog spas and cabanas.
Even worse is that most of the properties receiving New York benefits will be out of state. Since Opportunity Zones are a federal program, investors can receive tax write-offs for investing in any “zone” in the country. That means that if a Manhattan billionaire invests in a high-rise in Houston and wants to write it off on his New York taxes, he can — and it will cost New York state and city revenues for public services.
The program’s beneficiaries aren’t limited to luxury apartment developers. Other companies have funds set up to support Opportunity Zone investments in gun vendors in Florida, oil and gas companies in Texas and data centers in Ohio. Gov. Kathy Hochul is trying to get data centers to pay their own electricity bills — so why should the state’s tax code force it to support data centers in Ohio?
Opportunity Zones will cost the state hundreds of millions of dollars during a major budget crisis. If the governor wants to ensure that New York’s money stays in the state during a crisis, one of the best things she can do is end this tax break for Trump cronies and the super-wealthy.
Senate Deputy Majority Leader Michael Gianaris of Queens represents the 12th state Senate District. Assemblyman Jeffrey Dinowitz of the Bronx represents the 81st Assembly District.