The 2017 Tax Cuts and Jobs Act created special “opportunity zones” that give investors generous tax breaks in exchange for investing in low-income neighborhoods. The purpose of the tax law is “to spur economic development and job creation in distressed communities,” according to the IRS, but critics say that they are ripe for abuse, as when developers in already gentrifying areas use the tax breaks to build luxury housing they probably would have built in any event.
ProPublica examined one such apparent abuse, which arose after state officials in Florida, prompted by some lobbying from a prominent donor to then-Florida Gov. Rick Scott, designated a waterfront area as an opportunity zone. The beginning of the piece gives a good sense of what happened next:
“The Rybovich superyacht marina lies on the West Palm Beach, Florida, waterfront, a short drive north from Mar-a-Lago. Superyachts, floating mansions that can stretch more than 300 feet and cost over $100 million, are serviced at the marina, and their owners enjoy Rybovich’s luxury resort amenities. Its Instagram account offers a glimpse into the rarefied world of the global 0.1% — as one post puts it, ‘What’s better than owning a yacht, owning a yacht with a helicopter of course!’
“Rybovich owner Wayne Huizenga Jr., son of the Waste Management and Blockbuster video billionaire Wayne Huizenga Sr., has long planned to build luxury apartment towers on the site, part of a development dubbed Marina Village.
“Those planned towers, and the superyacht marina itself, are now in an area designated as an opportunity zone under President Donald Trump’s 2017 tax code overhaul, qualifying them for a tax break program that is supposed to help the poor.”