Opportunity Zones 2.0: Public sector readiness checklist

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Opportunity Zones 2.0 (OZ) reopens a powerful tool for place-based investment, but only jurisdictions that prepare deliberately will see results. This checklist reflects what public-sector leaders should do now, before the designation window opens.

Step one: Set up ownership and direction

Appoint a single OZ 2.0 lead: Designate one office or senior staff member responsible for OZ strategy, coordination and deadlines.
Create an interagency OZ working group: Include economic development, housing, planning, transportation, workforce and budget/tax staff.
Brief elected leadership early: Explain what changed in OZ 2.0 (permanence, tighter eligibility, rural incentives, reporting). Clarify tradeoffs and political risks associated with poor zone selection.
Set a clear economic objective: Decide what OZs are meant to deliver—jobs, housing, rural investment, business growth or some combination.

Step two: Prepare for zone selection (now – mid-2026)

Pull the OZ 2.0 eligibility list: Screen census tracts using the new income and poverty thresholds. Confirm no reliance on contiguous tract exceptions (now eliminated).
Define written zone selection criteria: Balance economic distress with market feasibility, infrastructure access and on-the-ground community readiness.
Analyze OZ 1.0 performance: Identify which past zones attracted investment and which did not. Avoid repeating ‘no-investment’ zones—tracts that received little or no OZ activity under OZ 1.0.
Intentionally incorporate a rural strategy: Identify tracts that benefit from enhanced rural OZ incentives. Confirm that rural projects can meet the 50% substantial improvement threshold.
Plan a transparent public input process: Publish selection criteria, consider local recommendations and document decision-making.

Step three: Build a real project pipeline (before investors call)

Inventory investable projects: Include real estate, operating businesses, industrial, logistics or mixed-use sites.
Prioritize projects with site control: Focus on publicly owned sites, projects with identified development partners or those with a clear land assembly path.
Preclear major development barriers: Address zoning alignment, environmental conditions, and utility or infrastructure capacity issues.
Create investor-ready project sheets: Include location and OZ status, proposed use and size, estimated capital stack and available local incentives.

Step four: Align policies and incentives

Map all complementary incentives: Identify state and local tax credits, grants and infrastructure funding sources.
Evaluate stacking opportunities: Assess compatibility with New Markets Tax Credits (NMTC), Low-income housing tax credits (LIHTC) or workforce housing tools and brownfield or site redevelopment programs.
Streamline development approvals: Reduce uncertainty in zoning, permitting and entitlements to signal predictability to investors.
Explicitly integrate rural OZ advantages: Market the 30% basis step-up and highlight reduced improvement requirements.

Step five: Engage communities before deals are announced

Document community priorities: Housing affordability, job access and small business support.
Meet with local stakeholders early: Engage anchor institutions, nonprofits and residents.
Set expectations for investors: Encourage local hiring, use of local and small-business suppliers, and mixed-income housing where appropriate.
Assess displacement risks: Monitor housing supply and coordinate with housing stabilization and tax relief tools.

Step six: Prepare for investor engagement

Develop a clear OZ 2.0 value proposition: Articulate the community’s place-based assets and how they align with OZ 2.0 rules.
Create plain-language OZ materials: Explain how OZ 2.0 works, including timelines, holding periods and basic compliance requirements.
Build relationships with capital providers: Engage Qualified Opportunity Funds, banks, CDFIs and developers.
Position government as a facilitator: Convene, connect and de-risk—without overpromising returns.

Step seven: Prepare for reporting and accountability

Understand OZ 2.0 reporting requirements: Anticipate expanded federal reporting obligations and penalties for noncompliance.
Define success metrics: Jobs created, housing units delivered and businesses launched or expanded.
Assign data ownership: Determine who collects, validates and reports data.
Create a feedback loop: Inform zone strategy and project focus throughout each 10-year designation cycle.

Step eight: Think beyond 2027

Integrate OZs into the 10-year economic strategy: Treat OZs as permanent infrastructure, not a short-term incentive.
Document decisions and outcomes: Prepare institutional knowledge for the next redesignation cycle.
Assess staffing and capacity: Ensure long-term program management is realistic and resourced.

Opportunity Zones 2.0: Public sector readiness checklist | Baker Tilly

Opportunity Zones 2.0: Public sector readiness checklist

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