Partnering with a Seattle-based proptech company that uses AI to determine the best use of land, ATTOM Data Solutions has identified the most attractive opportunities in the nation for housing developers to take advantage of federal reinvestment tax benefits.
ATTOM and CityBldr identified 11 neighborhoods in seven states and the District of Columbia with some of the best potential for using Opportunity Zone tax benefits designed to spur revival in low-income communities across the United States.
The neighborhoods are Anacostia in Washington, D.C.; South Shore in Chicago; City Heights in San Diego; Mid-City in Los Angeles; Parramore in Orlando, Fla; Central District in eastern Seattle; West Colfax in Denver; Spartan Keyes in San Jose, Calif.; North End/New Center in Detroit; Buckman/Kerns in Portland, Ore; and Hilltop in Tacoma, Wash.
ATTOM said most of those areas stand out as notably poorer and more densely populated than the U.S. as a whole, with lower income and educational levels and far higher percentages of renters than homeowners. Most have home values that far exceed the national median home price.
“This data tells us that housing developers should consider investing in these neighborhoods because they have an immense amount of potential, plus tax benefits aimed at realizing that potential,” CityBldr co-founder and CEO Bryan Copley said in a release. “What we’ve done with this study is create a standardized score to compare every opportunity zone in the U.S. to determine which areas would yield the highest average return on investment.”
The largest increases in median home prices from the first half of 2019 to the first half of 2020, based on ATTOM data, were in North End/New Center (up 25 percent); Parramore in Orlando (up 31 percent); and South Shore (up 91 percent). The biggest declines were in Spartan Keys (down 7 percent); Mid-City (down 12 percent); and Hilltop (down 32 percent).
“Factoring in home values and how they’ve done in the past year adds a critical piece of data to the picture,” ATTOM Chief Product Officer Todd Teta said. “Developers can get a demographic snapshot of what these areas look like, plus the hard numbers on how home prices are changing.”
Median household incomes in the highlighted areas range from $20,205 in Tacoma’s Hilltop area to $57,009 in the Spartan Keyes section of San Jose. Seven of the 11 areas have median household incomes below $40,000 and all 11 are beneath the national level of $61,937.