Lei Ding and Peter Birke of the Federal Reserve Bank of Philadelphia have published a report on Opportunity Zones, “How Are Cities Leveraging Opportunity Zones for Community Development? Philadelphia as a Case Study.”  Using Philadelphia as a case study, this study intends to reflect on the selection of Opportunity Zones in major cities and to explore real estate market trends and residential mobility in designated zones in Philadelphia. This study focuses on the neighborhood factors predicting Opportunity Zone designations in 2018, instead of who has been impacted by those designations, by clarifying the following questions:

  1. How were Opportunity Zones selected in Philadelphia, and how do they compare with the eligible neighborhoods that were not selected?
  2. Are gentrifying neighborhoods in Philadelphia more likely to be designated as Opportunity Zones?
  3. What have been the market trends after neighborhoods were designated as Opportunity Zones in Philadelphia?

The report finds, “that gentrifying areas were more likely to be designated as Opportunity Zones in Philadelphia, although the zones generally had higher levels of economic distress…This raises the concern that Opportunity Zone investment in Philadelphia may be concentrated in gentrifying neighborhoods, where investments would have flowed even without the program’s tax incentives, and pass over more distressed areas.”