President Trump signed an executive order Wednesday to create a new White House council for promoting private investment in “opportunity zones” in more than 8,700 distressed communities across the U.S., aiming to expand prosperity to neglected zip codes.
The council, to be chaired by Housing and Urban Development Secretary Ben Carson, will help streamline applications for communities to qualify for the investments, the president said.
“Our goal is to ensure that America’s great new prosperity is broadly shared by all of our citizens,” Mr. Trump said at the White House. “We are drawing investment into neglected and underserved communities of America so that all Americans, regardless of Zip code, have access to the American Dream.”
White House officials said they hope the program will attract as much as $100 billion to those communities.
For too long, Mr. Trump said, economic development has been concentrated in certain large metropolitan areas.
“With the creation of today’s council, the resources of the whole federal government will be leveraged to rebuild low-income and impoverished neighborhoods that have been ignored by Washington in years past,” the president said.
The 2017 tax reform law included provisions for opportunity zones by allowing for capital-gains tax cuts for investors who provide funds to revitalize depressed communities. About 35 million people live in the communities identified so far, and the poverty rate is nearly double the national average in those communities, said Jeron Smith, assistant to the president for legislative affairs.
“It allows more Americans to share in the economic success of this country,” Mr. Smith said.
The president was to have made the announcement in Baltimore, but the White House canceled that trip, citing scheduling difficulties. Pastor Donte Hickman of the Southern Baptist Church in east Baltimore attended the White House event, saying the program will help revitalize his community.
“We have the plan, we have the property, we have the people, we have the professional expertise, and we have the prospectus to jump-start your urban initiative,” he told the president. “Baltimore is prepared to be a demonstration project for a national urban revitalization strategy.”
Also attending the event was Sen. Tim Scott, South Carolina Republican who advocated for the provision in the tax reform law. He called the progress under the president “unprecedented.”
The low-income zones are census tracts, designated by governors and approved by the Treasury Department. The goal is to encourage investment in them by offering tax breaks for new businesses and housing.
Investors who provide money for projects in these qualifying zones can lower or even eliminate their capital gains taxes.
Critics raised concerns that the new program could benefit the Trump Organization and the family real-estate business of presidential son-in-law Jared Kushner, who owns properties in several communities designated for tax breaks.
The Associated Press reported this week that Mr. Kushner holds a big stake in a real-estate investment firm, Cadre, that recently announced it is launching a series of Opportunity Zone funds that seek to build major projects under the program from Miami to Los Angeles. The report stated that he and wife Ivanka Trump have interests in at least 13 properties held by Mr. Kushner’s family firm that could qualify for the tax breaks because they are in Opportunity Zones in New Jersey, New York and Maryland.
The liberal Center for American Progress said the program “was crafted to leave the door open for exploitation by the wealthy and the politically-connected, as already evidenced by none other than President Trump’s own family.”