As the clock winds down on the original Opportunity Zone (OZ) program, a growing chorus of institutional and high-net-worth investors is calling for a next-generation version—Opportunity Zones 2.0. Their case? OZs have quietly catalyzed a surge in multifamily development across distressed urban corridors, creating outsized value in an asset class that continues to deliver stable returns amid economic volatility.

A Federal Tax Incentive with Real Estate at Its Core
Born out of the 2017 Tax Cuts and Jobs Act, the Opportunity Zone program was intended to channel long-term private capital into roughly 8,800 low-income census tracts across the U.S. It provided investors with the ability to defer and reduce capital gains taxes—if those gains were reinvested into Qualified Opportunity Funds (QOFs) that backed development in designated OZs.

​While the policy has faced criticism—particularly over the impermanence of the tax break and its uneven application across rural markets—its results in multifamily real estate are impossible to ignore. According to CoStar, over 68,000 more apartment units have been delivered in OZs than would have otherwise occurred, representing more than $18 billion in asset value. In 2021, projects in OZs accounted for 18% of all U.S. apartment deliveries—a 50% increase from their share in 2017.

Consider Los Angeles, where developers like Cityview have seized on OZ incentives to scale ground-up multifamily developments in underserved neighborhoods. Its flagship project, Jasper, transformed a former bookbinding factory in West Adams into a 296-unit luxury residential asset. With rooftop sky decks, a poolside lounge, and walkability to USC and transit hubs, Jasper is now nearly fully leased—proof that strategic OZ investing can yield strong fundamentals and institutional-grade performance.

​Cityview’s momentum has continued, with 7,400+ units currently under construction in L.A.’s opportunity zones. “We realized a third of our pipeline already sat inside OZs,” said Damian Gancman, CIO and CFO of Cityview. “This program gave us the structure to tap into that value—and we’re only getting started.”