Opportunity in Ohio: Rethinking Northeast Ohio\u27s Opportunity Zones with Local Legislation

Welcome to Census Tract 1186.02! Here, in a small sliver of Cleveland’s Glenville neighborhood, tucked between Superior and Hough Avenues, you will uncover a lot. You will discover a rich history of the city’s ethnic and cultural roots. You will also find gang violence, underperforming schools, a median household income of $9,526, and a poverty rate of 66.5 percent. Something you will not find in 1186.02 is investment. Private or public, money is not flowing in to 1186.02 and it has not for a long time. The substantial toll of continuous underinvestment on the residents of this neighborhood, one of Cleveland’s poorest, is palpable and the need for relief is clear. This relief recently became possible when 1186.02 was designated as a Qualified Opportunity Zone by the U.S. Treasury Department. This designation, made available through the Tax Cuts and Jobs Act of 2017, could be a watershed moment for Glenville. By providing significant federal tax benefits to investors, Congress hopes to encourage a massive inflow of investment into low-income communities, like Glenville, that have long suffered from perennial underinvestment. Unfortunately, the hope of relief for Tract 1186.02 and its residents will likely be short-lived. Because the federal Opportunity Zone provision was written too broadly, it not only permitted too many designations, but it also allowed for the designation of numerous not-so-poor neighborhoods. In other words, the law pits communities that need the investment most—like Glenville—against neighborhoods that are much better-off—like Cleveland’s downtown core and trendy Tremont neighborhood. For context, there are tracts in the city’s downtown core and Tremont neighborhood that were designated with median household incomes that septuple (i.e. seven times as much) those in 1186.02. The odds that areas like Glenville can outcompete such better-situated areas for private investment dollars are slim-to-none. As a result, the residents of 1186.02 will be left behind again. But it does not have to be this way. It is not too late for the City of Cleveland and Cuyahoga County to take advantage of the many positive aspects of the Opportunity Zone provision, while ensuring that those benefits are directed towards their most-in-need neighborhoods. By enacting local legislation that targets these underdog tracts for additional services and public investment, this Note argues Cleveland and Cuyahoga County can level the playing field and provide neighborhoods like Glenville and tracts like 1186.02 with the competitive advantages they need to rediscover their potential