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Opportunity zones have quickly become one of the most popular investment models, and it isn’t surprising. The model has the potential to completely avoid capital gains tax—but with a trade off. Investment has to target communities in need of economic growth and investment. However, does the model actually work in action, and will it help in bringing more affordable housing supply to the market in Southern California. Experts say yes.

“We certainly believe that this tax legislation will aid in encouraging more affordable development across Southern California,” Richard Lara, president and CEO of RAAM Construction, tells GlobeSt.com. “There are more than 879 opportunity zones across the region, many of which are regions where demand for affordable housing is high.”

However, it isn’t market-rate developers who are scrambling to build affordable projects in opportunity zones, but rather experienced affordable housing developers. “Affordable developers and investors are well positioned to leverage opportunity zones because they already have experience working in underserved markets without this tax legislation,” says Lara. “They understand these markets and the legislation aids in making more investment possible in the space.”

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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