Habitat for Humanity is planning on using recent changes in the tax law to redevelop a 120-acre, 341-unit mobile home park in Charlottesville, Virginia, into a city within a city, complete with single-family homes, townhouses and retail. The nonprofit bought the land in 2007 and has already spent $20 million at the park to stabilize the infrastructure. The residents own the homes but not the land and have a voice in the renovation plans. To help finance the project, Habitat is exploring tax credits attached to Opportunity Zones.
Spearheaded by Sean Parker of Napster and Facebook fame, the “Opportunity Zone” program gives a (potentially large) tax break to people who invest capital gains—profit they earn from the sale of assets—in distressed areas of the country. Other than exclusions on a few so-called “sin” businesses, like bars, massage parlors, and tobacco shops, the funds can then be invested in almost anything—like real estate, startups, or infrastructure.
“We think [the park] is a great opportunity for people to ... really move the needle in terms of affordable housing, and also create a national model for how to [develop] without gentrifying [a place],” said Dan Rosensweig, CEO of Habitat for Humanity of Greater Charlottesville. “[Opportunity zones are] kind of a natural fit. We would have to attract significant investment one way or another, and we think this has a lot of potential.”
