GROWING SPATIAL INEQUALITY: AN EXAMINATION OF THE IMPACT OF OPPORTUNITY ZONE DESIGNATION ON HOUSING PRICE GROWTH

Abstract

Inequality is one of the most pressing concerns in the developed world, particularly in the United States. The Tax Cuts and Jobs Act of 2017 created Opportunity Zones, a federal place-based policy that provides tax incentives for capital investments in more than 8,000 low-income Census tracts across the United States and its territories. This thesis compares single-family housing price growth in Opportunity Zones to that of Census tracts that were eligible but ultimately not selected to be included in the program, using a difference-in-differences model. This model is also adapted to make the same comparison using sub-samples based on certain population statistics thresholds such as poverty rate, unemployment rate, etc. Finally, an intra-designation analysis is conducted to determine if the policy should have had more stringent requirements for eligibility or reduced designations. I find that there were small, positive, and statistically significant effects on overall housing price growth in designated tracts with ambiguous effects on the percentage annual change of HPI. Lastly, there were strong, positive effects of housing price within the intra-designation model which provide evidence for future academic literature studying this policy and other potential place-based policies.