Building Stronger Communities Through Affordable Housing Investments in Opportunity Zones
Affordable Housing Investments
At 33 Holdings, we are committed to bring a positive impact to communities and meet the growing demand for affordable housing options. Access to safe, stable, and affordable housing is a struggle for many Americans. This disproportionately affects people in distressed communities, first time home buyers, and many others who are looking for housing options that meet their needs and their budgets.
Investing in affordable housing not only helps to address this social challenge, but it can also be a smart investment opportunity. Here are some reasons why:
Strong demand: There is a high demand for affordable housing in the United States, particularly in urban areas where housing costs have been rising faster than wages. Investing in affordable housing can help meet this demand and provide stable, long-term rental income for investors.
- Government support: The government provides various forms of support for affordable housing, such as tax credits, grants, and loans. These incentives can help reduce the cost of building and operating affordable housing, making it a more attractive investment opportunity.
- Stable returns: While the rental income from affordable housing may be lower than market-rate housing, it is often more stable. Tenants in affordable housing are more likely to stay for longer periods of time, reducing turnover and vacancy rates. Additionally, government subsidies can help ensure a consistent stream of rental income.
- Social impact: Investing in affordable housing provides a meaningful way to create positive social impact while generating revenue.
Opportunity Zone Investments
First and foremost, it’s important to understand the tax benefits associated with investing in an Opportunity Zone. Investors can defer capital gains taxes by investing in a Qualified Opportunity Fund (QOF) within 180 days of realizing the gains. The amount of the deferred gain is then reduced by 10% if the investment is held for at least 5 years, and by an additional 5% if the investment is held for at least 7 years. If the investor holds the investment in the QOF for at least 10 years, any appreciation in the value of the investment is tax-free.
Investing in Opportunity Zones can not only provide tax benefits, but it can also have a positive impact on the communities in which the investments are made. By investing in these economically-distressed areas, investors can help revitalize neighborhoods, create jobs, and support small businesses, among other benefits.
One of the primary ways that investing in Opportunity Zones can have a positive impact is by supporting economic development. By providing capital to businesses and entrepreneurs in these communities, investors can help create new jobs, increase access to goods and services, and promote economic growth. This can be especially impactful in areas that have traditionally struggled to attract investment and create jobs.
To learn more about Opportunity Zone Investments, get in touch with our Investor Relations Team!