The Treasury Department is widely expected to release updated opportunity zones (OZ) regulations in the near future–with the regulations first going to the Office of Information and Regulatory Affairs, perhaps this month, for clearance before being released to the public 30-plus days later.

Treasury is expected to release updated opportunity zones (OZ) regulations in the coming weeks, and we expect that the updated regulations will merge the first two tranches of regulations into one and provide more clarity on many remaining issues, as well as some outright changes. Before their release, however, Treasury must first send the updated regulations to the Office of Information and Regulatory Affairs (OIRA) for their review and comment, after which, the regulations can be released.

Since the enactment of the opportunity zones (OZ) tax incentive, which was designed to increase private capital investment in low-income communities and low-income community businesses, there has been great interest in using the new incentive to create more affordable rental housing. Participants in the OZ incentive are not limited to investing in affordable rental housing, but the incentive has aspects that are attractive to affordable housing developers and investors. For example, OZs aren’t subject to an allocation limit such as the low-income housing tax credit (LIHTC).

As the opportunity zone (OZ) incentive continues to gather momentum and interest, Novogradac has been tracking and compiling data on opportunity funds and their plans. In June, a post in this space provided the results of an initial survey of funds raised and related information. Since that writing, activity in the OZ community has continued and based on Novogradac research the amount of capital raised by qualified opportunity funds (QOFs) is nearly $2.5 billion.