[Federal Register Volume 84, Number 74 (Wednesday, April 17, 2019)]
[Notices]
[Pages 16029-16032]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-07682]



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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6155-N-01]


Review of HUD Policy in Opportunity Zones

AGENCY: Office of the Assistant Secretary for Policy Development and 
Research (PD&R), Department of Housing and Urban Development (HUD).

ACTION: Request for information.

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SUMMARY: Consistent with Executive Order 13853, ``Establishing the 
White House Opportunity and Revitalization Council,'' this document 
informs the public that HUD intends to maximize the beneficial impact 
of investment in Opportunity Zones. HUD is reviewing its existing 
policies, practices, planned actions, regulations, and guidance 
regarding HUD-administered programs and laws to identify actions HUD 
can take to encourage beneficial investment, both public and private, 
in urban and economically distressed communities, including qualified 
Opportunity Zones. HUD seeks input and recommendations from the public 
regarding potential agency actions.

DATES: Comment Due Date: June 17, 2019.

ADDRESSES: Interested parties are invited to submit comments regarding 
this request for information. There are two methods for submitting 
public comments. All submissions must refer to the above docket number 
and title.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Public Finance and Regulatory Analysis Division, Office of 
Policy Development and Research, Department of Housing and Urban 
Development, 451 7th Street SW, Room 8216, Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
www.regulations.gov. HUD strongly encourages the public to submit ideas 
electronically. Electronic submission of ideas allows the submitter 
maximum time to formulate and present the suggestion, ensures timely 
receipt by HUD, and enables HUD to make the ideas received immediately 
available to the public. Suggestions submitted electronically through 
the www.regulations.gov website can be viewed by interested members of 
the public. Members of the public should follow the instructions 
provided on that site to submit suggestions electronically.
    Note: To receive consideration, ideas must be submitted through one 
of the two methods specified above. Again, all submissions must refer 
to the docket number and title of the request for information.
    No Facsimile Submissions: Facsimile (fax) submissions are not 
acceptable.
    Public review of information received: All information properly 
submitted for consideration by HUD will be available for inspection and 
downloading at www.regulations.gov. Members of the public without ready 
access to the internet may request an appointment to review the 
information submitted by calling the Public Finance and Regulatory 
Analysis Division at 202-402-2967 (this is not a toll-free number). 
Individuals with speech or hearing impairments may access this number 
via TTY by calling the Federal Relay Service at 1-800-877-8339 (this is 
a toll-free number). An appointment for public inspection and copying 
of the information must be scheduled in advance and will occur between 
8 a.m. and 5 p.m. weekdays at the above address.

FOR FURTHER INFORMATION CONTACT: Daniel Marcin, Economist, Public 
Finance and Regulatory Analysis Division, Office of Policy Development 
and Research, Department of Housing and Urban Development, 451 7th 
Street SW, Room 8216, Washington, DC 20410-0500; telephone number 202-
402-2967 (this is not a toll-free number). Persons with hearing or 
speech impairments may access this number through TTY by calling the 
toll-free Federal Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Context: Opportunity Zones and the White House Opportunity and 
Revitalization Council

    The 2017 Tax Cuts and Jobs Act (Pub. L. 115-97) created new tax 
incentives for investments made in Opportunity Zones to spur economic 
development and job creation by encouraging long-term investment in 
low-income communities nationwide. Opportunity Zones are designated 
census tracts that provide incentives for long-term private sector 
investment in economically distressed communities. State executives 
nominated census tracts of communities most in need of private 
investment to the U.S. Department of the Treasury, which then certified 
the tracts as Opportunity Zones. The Opportunity Zone designation 
encourages investment in these certified census tracts by granting 
investors extensive Federal tax advantages for using their capital 
gains to finance new projects and enterprises (or substantially improve 
existing projects and enterprises) located within Opportunity Zones.
    Executive Order 13853 created the White House Opportunity and 
Revitalization Council with the HUD Secretary (or the Secretary's 
designee) as the Chair. This Executive Order directs the Council to:
    (a) Assess the actions each Federal agency can take under existing 
authorities to prioritize or focus Federal investments and programs on 
urban and economically distressed communities, including qualified 
opportunity zones;
    (b) Assess the actions each agency can take under existing 
authorities to minimize all regulatory and administrative costs and 
burdens that discourage public and private investment in urban and 
economically distressed communities, including qualified opportunity 
zones;
    (c) Regularly consult with officials from State, local, and tribal 
governments and individuals from the private sector to solicit feedback 
on how best to stimulate the economic development of urban and 
economically distressed areas, including qualified opportunity zones;
    (d) Coordinate Federal interagency efforts to help ensure that 
private and public stakeholders--such as investors; business owners; 
institutions of higher education (including Historically Black Colleges 
and Universities, as defined by 50 U.S.C. 3224(g)(2), and tribally 
controlled colleges and universities, as defined by 25 U.S.C. 
1801(a)(4)); K-12 education providers; early care and education 
providers; human services agencies; State, local, and tribal leaders; 
public housing agencies; non-profit organizations; and economic 
development organizations--can successfully develop strategies for 
economic growth and revitalization;
    (e) Recommend policies that would:
    (i) Reduce and streamline regulatory and administrative burdens, 
including burdens on applicants applying for multiple Federal 
assistance awards;
    (ii) Help community-based applicants, including recipients of 
investments from qualified opportunity funds, identify and apply for 
relevant Federal resources; and
    (iii) Make it easier for recipients to receive and manage multiple 
types of public and private investments, including by aligning certain 
program requirements;
    (f) Evaluate the following:
    (i) Whether and how agencies can prioritize support for urban and 
economically distressed areas, including

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qualified opportunity zones, in their grants, financing, and other 
assistance;
    (ii) Appropriate methods for Federal cooperation with and support 
for States, localities, and tribes that are innovatively and 
strategically facilitating economic growth and inclusion in urban and 
economically distressed communities, including qualified opportunity 
zones, consistent with preserving State, local, and tribal control;
    (iii) Whether and how to develop an integrated web-based tool 
through which entrepreneurs, investors, and other stakeholders can see 
the full range of applicable Federal financing programs and incentives 
available to projects located in urban and economically distressed 
areas, including qualified opportunity zones;
    (iv) Whether and how to consider urban and economically distressed 
areas, including qualified opportunity zones, as possible locations for 
Federal buildings, through consultation with the General Services 
Administration;
    (v) Whether and how Federal technical assistance, planning, 
financing tools, and implementation strategies can be coordinated 
across agencies to assist communities in addressing economic problems, 
engaging in comprehensive planning, and advancing regional 
collaboration; and
    (vi) What data, metrics, and methodologies can be used to measure 
the effectiveness of public and private investments in urban and 
economically distressed communities, including qualified opportunity 
zones.

II. Overview of Opportunity Zones

    There are more than 8,700 Census tracts designated by a Governor or 
other chief administrative official as Opportunity Zones across all 50 
States, the District of Columbia, and five U.S. territories. The 
following are relevant data and characteristics of the Opportunity 
Zones and those who reside within Opportunity Zones:
     Nearly 35 million Americans live in communities designated 
as Opportunity Zones.
     On average, the median family income in an Opportunity 
Zone is 37 percent below the State median.
     More than one-in-five of all Opportunity Zones have a 
poverty rate over 40 percent, compared to just over one-in-eight ``low-
income communities'' (LICs) and one-in-20 Census tracts nationwide.
     71 percent of Opportunity Zones meet the U.S. Treasury 
Department's definition of ``severely distressed.'' \1\
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    \1\ ``Severely distressed'' generally means a poverty rate of 30 
percent or a median family income no greater than 60 percent of the 
area benchmark. See The State of Socioeconomic Need and Community 
Change in Opportunity Zones, Economic Innovation Group (Dec. 2018). 
https://eig.org/opportunityzones/communitychange.
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     Life expectancy is on average three years shorter for 
Opportunity Zone residents than it is nationally.
     Approximately 22 percent of Opportunity Zone adult 
residents have not attained a high school diploma, compared to 13 
percent nationally.

III. HUD-Supported Programs and Initiatives Within Opportunity Zones

    Below is a snapshot of HUD's programs and initiatives within 
Opportunity Zones.\2\ These statistics are being provided in order to 
facilitate the public's thought process--as well as generate ideas and 
answers to the questions asked later in this request for information--
regarding HUD's existing program presence within Opportunity Zones. 
Most numbers are rounded to the nearest thousand. Where percentages of 
the total are given, those percentages exclude data for which location 
is unreliable or misleading.
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    \2\ These statistics are current as of December 17, 2018.
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General

    [cir] 2,394,000 persons living in HUD-assisted housing within 
Opportunity Zones, representing about 27 percent of residents of HUD-
assisted housing.
    [cir] 14 proposed EnVision Center sites inside or within 1 mile of 
an Opportunity Zone.

Office of Public and Indian Housing (PIH)

    [cir] 371,000 public housing units within Opportunity Zones, 
representing about 38 percent of the total.
    [cir] 738,000 persons living in public housing within Opportunity 
Zones, representing about 39 percent of the total.
    [cir] 2,254 public housing developments within Opportunity Zones, 
or about 33 percent of the national total.
    [cir] 465,000 housing choice voucher (HCV) units within Opportunity 
Zones, 22 percent of the total.
    [cir] 992,000 persons with HCVs, or 21 percent of the national 
total, living within Opportunity Zones.
    [cir] 62,000 project-based voucher (PBV) units within Opportunity 
Zones, which is 32 percent of the total.
    [cir] 116,000 persons living in PBV units within Opportunity Zones, 
representing 32 percent of the total.
    [cir] 65 Choice Neighborhood Grants--with a total of approximately 
$571,643,000 in grant funding--from 2010-2016 within Opportunity 
Zones.\3\ These are 68 percent of all Choice Neighborhood Grants and 86 
percent of national Choice Neighborhood Grant spending. 46 of these 
grants were Planning Grants, and the other 19 were Implementation 
Grants.
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    \3\ Grant is counted if the target area contains the center of 
one or more Opportunity Zone Census tracts.
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Office of Housing

    [cir] 337,000 project-based rental assistance (PBRA) units within 
Opportunity Zones, or 27 percent of the national total.
    [cir] 548,000 persons living in PBRA units within Opportunity 
Zones, or 27 percent of the total.
    [cir] 2,400 Multi-Family (MF) housing properties with Federal 
Housing Administration (FHA) mortgage insurance within Opportunity 
Zones, representing 21 percent of multifamily housing properties with 
FHA mortgage insurance.
    [cir] $14,755,260,000 in unpaid principal balance for MF properties 
with FHA mortgage insurance within Opportunity Zones, for 17 percent of 
the national total.
    [cir] 617,000 FHA-insured Single-Family properties within 
Opportunity Zones, or 8 percent of the total.
    [cir] $75,353,474,000 in unpaid principal balance for Single-Family 
properties with FHA mortgage insurance within Opportunity Zones, or 6 
percent of all Single-Family unpaid principal balance.
    [cir] 536 healthcare facilities with FHA mortgage insurance in 
Opportunity Zones, representing 12 percent of all such facilities.
    [cir] $4,017,448,000 in unpaid principal balance for healthcare 
facilities with FHA insurance in Opportunity Zones, representing 12 
percent of the total unpaid principal balance on FHA-insured mortgages 
on healthcare facilities.
    [cir] Almost one-third of Rental Assistance Demonstration (RAD) 
Component 1 conversions fall within Opportunity Zones.

Office of Community Planning and Development (CPD)

    [cir] Over 1,200 cities, urban counties, States, Puerto Rico, and 
U.S. Territories received over $3,000,000,000 in Community Development 
Block Grant (CDBG) funding each year between fiscal years 2014 and 
2019. Since all communities can potentially receive CDBG funding, 
either directly from HUD or through their respective State government, 
funds could be used to

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assist activities and projects in Opportunity Zones nationwide.
    [cir] There are 600 outstanding Section 108 guaranteed loans with 
an outstanding loan balance of $1,250,000,000 for community and 
economic development projects nationwide. Under the Section 108 Loan 
Guarantee Program, CBDG grantees nationwide have approximately $14 
billion in available borrowing capacity that could potentially be 
deployed in Opportunity Zones.
    [cir] Approximately $84,000,000,000 in Community Development Block 
Grant--Disaster Recovery (CDBG-DR) funds has been awarded since 2001 to 
help cities, counties, and States recover from Presidentially-declared 
disasters. Nearly half of this amount has been awarded in response to 
disasters occurring between 2015 and 2017. Since CDBG-DR assistance may 
fund a broad range of recovery activities, these funds could be used in 
eligible disaster-impacted Opportunity Zones.
    [cir] 256,000 HOME Investment Partnerships Program (HOME) housing 
projects completed--with a total of approximately $2,853,095,000 in 
grant funds expended--from 1996-2018 within Opportunity Zones.

Office of Field Policy and Management (FPM)

    [cir] There are 186 Opportunity Zones within HUD's 14 Urban Promise 
Zones.
    [cir] An approximate numerical breakdown of Opportunity Zones 
throughout HUD's 10 regions:

Region I: 344
Region II: 683
Region III: 741
Region IV: 2,529
Region V: 1,339
Region VI: 1,043
Region VII: 341
Region VIII: 272
Region IX: 1,194
Region X: 278

IV. Purpose of This Request for Information

    HUD has determined that it should undertake a substantive review of 
existing policies, practices, planned actions, regulations and guidance 
regarding HUD-administered programs to identify actions HUD can take to 
encourage beneficial investment in urban and economically distressed 
communities, including Opportunity Zones, while continuing to fulfill 
its mission to create strong, sustainable, inclusive communities and 
quality affordable homes for all. In conducting this review, HUD 
believes that it would benefit from the information and perspectives of 
State, local and tribal officials, experts in relevant disciplines, 
affected stakeholders in the private sector, and the public as a whole. 
HUD is, therefore, requesting information to guide and enhance this 
review.

VI. Specific Information Requested

    To assist in HUD's approach to Opportunity Zones, HUD invites ideas 
and information on the following questions:
    (1) How should HUD use its existing authorities to maximize the 
beneficial impact of public and private investments in urban and 
economically distressed communities, including Opportunity Zones? For 
example:
    a. What actions can HUD take under existing authorities to 
prioritize or focus Federal investments and programs on urban and 
economically distressed communities, including Opportunity Zones?
    b. What actions can HUD take under existing authorities to minimize 
all of the regulatory and administrative costs and burdens that 
discourage public and private investment in urban and economically 
distressed communities, including Opportunity Zones?
    c. What tools can HUD provide to make local communities, investors 
and other stakeholders more aware of the full range of applicable 
Federal financing programs and incentives available to projects located 
in urban and economically distressed areas, including Opportunity 
Zones?
    d. What polices could HUD implement that would help community-based 
applicants, including recipients of investments from Qualified 
Opportunity Funds, identify and apply for relevant Federal resources?
    e. What policies could HUD implement that would make it easier for 
recipients to receive and manage multiple types of public and private 
investments, including by aligning certain program requirements?
    (2) HUD is considering creating an information portal on 
Opportunity Zones. What types of information should HUD include in such 
a tool? How can it be made accessible to and most usable by HUD's 
various stakeholders and customers? If the portal includes information 
on Federal financing programs and incentives beyond those offered by 
HUD, what types of information would be most useful to include?
    (3) In what ways could HUD structure preference points for 
Opportunity Zones and incorporate policy objectives in the rating 
factors for applications in discretionary grant competitions to 
increase the incentive to invest in Opportunity Zones? In addition, how 
should HUD prioritize support for urban and economically distressed 
areas, including Opportunity Zones, in its grants, financing, and other 
assistance?
    (4) What types of technical assistance should be offered through 
HUD?
    (5) What role can HUD play in helping to ensure that existing 
residents, businesses, and community organizations in Opportunity Zones 
benefit from the influx of investment and remain the focus of their 
community's growth moving forward?
    (6) How can HUD properly evaluate the impact of Opportunity Zones 
on communities?
    (7) How should HUD interact with other stakeholders to maximize the 
success of the Opportunity Zone incentive? For example:
    a. How should HUD interact with officials from State, local, and 
tribal governments, institutions, local and regional agencies, 
businesses, and individuals from the private sector to most effectively 
encourage beneficial investment in urban and economically distressed 
areas?
    b. How should HUD participate in Federal interagency efforts to 
help ensure that private and public stakeholders can successfully 
develop strategies for economic growth and revitalization in urban and 
economically distressed areas? Stakeholders might include investors; 
business owners; institutions of higher education (including 
Historically Black Colleges and Universities, as defined by 50 U.S.C. 
3224(g)(2), and tribally controlled colleges and universities, as 
defined by 25 U.S.C. 1801(a)(4)); K-12 education providers; early care 
and education providers; human services agencies; State, local, and 
tribal leaders; public housing agencies; non-profit organizations; and 
economic development organizations.
    c. How should Federal technical assistance, planning, financing 
tools, and implementation strategies be coordinated across agencies to 
assist communities in addressing economic problems, engaging in 
comprehensive planning, and advancing regional collaboration?
    (8) How might Qualified Opportunity Fund investments support the 
goal of ending homelessness?
    (9) Are there other aspects of Opportunity Zones that should be 
considered and are not addressed in this request for information?


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    Dated: April 11, 2019.
Todd M. Richardson,
General Deputy Assistant Secretary for Policy Development and Research.
[FR Doc. 2019-07682 Filed 4-16-19; 8:45 am]
 BILLING CODE 4210-67-P