By Tim Scott
Today, there are over 52 million Americans living in distressed communities. I know all too well the feeling of hopelessness that comes from lack of opportunity in your neighborhood, growing up in a single-parent household, mired in poverty myself. Living in a forgotten community, one that has not enjoyed the growth many others have since the Great Recession, is a struggle so many Americans face day-to-day.
I believe the answer isn’t in another government program — but in leveraging the resources already in our private sector in a way we never have before. That’s where my Opportunity Zones initiative comes in.
My Opportunity Zones initiative, part of the 2017 Tax Cuts and Jobs Act, aims to bring long-term private investment to economically distressed communities, potentially unleashing $6 trillion in unused capital gains, by offering a deferral for investors. Opportunity Zones would unlock new private investment for communities where millions of Americans face the crisis of closing businesses, lack of access to capital, and declining entrepreneurship.
This initiative goes beyond a “band-aid” approach, and works to create long-term solutions in the form of restored economic opportunity, job growth, and prosperity for those who need it most.
Without creating another government program, or utilizing federal dollars, this new model has the potential to revitalize and bring opportunity to communities that were like my own growing up. The initiative hopes to spur the development of workforce and affordable housing, new infrastructure, startup businesses and upgrade existing underutilized assets.
The good news is that 71% of all designated Opportunity Zones qualify as “severely distressed,” and of that, the average zone has a poverty rate nearly double the national average with more than one-fifth of all zones having poverty rates of forty percent or higher. In addition, minorities comprise the majority of residents in the 8,700 Opportunity Zones across the nation, translating to 1.4 million minority households who could see their personal lives, financial security, and standard of living improve as a result of the local investments.
In South Carolina, 128 of the 135 designated opportunity tracts are considered low-income communities and there are at least two designated zones in each of our 46 counties. While tracts have been designated outside of large cities such as Columbia and Charleston, there are many more designated zones in the rural communities across South Carolina.
Many rural communities in South Carolina have often been left behind, while other parts of the state saw recovery from the recession, development and economic boom. For low-income, high-poverty areas in our state, and our nation, that suffer from low wages, lack of economic opportunity, and high unemployment due to lack of workforce opportunity, their designation as “Opportunity Zones” could be a game changer.
I have been touring the nation this past year on an “Opportunity Tour,” to view the designated zones across our country that have already started to take advantage of this initiative to make a positive change in their communities.
From South Carolina to Iowa, New Hampshire, Colorado and West Virginia, I have seen countless projects that give me hope for the future of this initiative. As I continue my tour, I look forward to seeing more zones and meeting more people that are using this program as a way to revitalize and bring opportunity to distressed communities all across America. I am proud Opportunity Zones have gained recognition as a key part to the next phase of economic expansion, with its strong emphasis on expanding the labor force and using the untapped resources already in each of these communities.
Regardless of background, upbringing or socioeconomic status, every American should enjoy unimpeded access to opportunity, and to be able to climb their way to a more fruitful tomorrow. For communities that are often overlooked and left behind when economic success and recovery seems to hit other areas of the state or nation, there is new hope. Let’s work together to restore the American dream, and finally make real, permanent change to the issue of poverty that has beleaguered our nation for far too long.
U.S. Sen. Tim Scott is a Republican from North Charleston. He serves on several Senate committees including finance; health, education, labor and pensions; housing and urban affairs; small business and entrepreneurship; and aging.