For three years during his time with the U.S. Department of Housing and Urban Development (HUD), Alfonso Costa Jr. was immersed in all matters related to Opportunity Zones. As the former Deputy Chief of Staff, Alfonso was responsible for advising Former HUD Secretary Ben Carson and overseeing all policy (including Opportunity Zones) carried out by HUD.
Alfonso has now returned to the private sector as Executive Vice President at the Falcone Group, where he is responsible for leading the vertically-integrated real estate development and investment firm’s affordable & workforce housing platform, as well as its strategy around Opportunity Zones — the initiative designed to economically help over 8,700 distressed U.S. communities, that is still so important to him.
Below is an edited transcript of Alfonso’s discussion during the National Opportunity Zones Virtual Forum, which was co-hosted by Akerman, JTC Americas, Brevet, and Cantor Fitzgerald. The transcript also includes his critique of the OZ initiative, his take on the power of private partnerships, and what he thinks the media could be doing better when it comes to OZ coverage.
For more content like this, you can read our blog with Ben Hobbs, Former Special Assistant to the President for Domestic Policy, about the future of Opportunity Zones. Additionally, we welcome you to view the full recording of the National Opportunity Zones Virtual Forum.
Laying the Opportunity Zones groundwork
When we formulated the White House Opportunity and Revitalization Council back in December 2018 — which was one year after the Tax Cuts and Jobs Act was passed — we started executing on what we wanted to do across the Executive Branch to support Opportunity Zones and other distressed communities.
My primary critique of the OZ initiative is around policy communication.
You often hear stories that, from my perspective, aren’t necessarily ubiquitous or representative at-large of what is transpiring across the country. The Urban Institute, which is a great organization, issued a report [last year] that does a pretty thorough job of looking at different dynamics of the Opportunity Zones initiative, but I don’t think it provides the whole story if you were to take a deep-dive look into Opportunity Zones.
How to make the Opportunity Zones initiative even better
The private sector truly needs to understand what the local communities are setting out to do, and what their goals are. We are seeing a lot of communities and cities create investment prospectuses, especially through a non-profit called Accelerator for America, which does phenomenal work led by President & CEO Aaron Thomas. The Erie Downtown Development Corporation is a great example of what can be brought to a neighborhood, and how to attract investors, from an Opportunity Zones standpoint.
Real estate has been the initial mover in the Qualified Opportunity Funds space, and in that context a holistic community that aims to support a live-work-play environment is going to be more attractive to investors. In terms of residential as a property type, local leaders would like to have ample housing supply that is of high quality and available to a wide range of different household incomes.
I also think a lot of communities and the private sector should continue to focus on and build those public-private-partnerships, especially to bring housing to fruition that can serve as an enticement for operating businesses to come into these communities. As a result of these partnerships, existing small businesses can attract capital and drive up tax revenue that can flow back to important public service programs such as education, firefighters, healthcare and police, as well as important service providers to local communities.
Watch the full recoding of the National Opportunity Zones Virtual Forum today!