While Opportunity Zones (OZs) were created to incentivize development in economically-distressed areas, the program is also going toward benefiting a loftier endeavor: the space race.
Multi-billionaires Jeff Bezos and Elon Musk both have pet projects to offer the private sector option for space shuttle rides. As reported by Bloomberg, their respective space company sites are in OZs, shielding their operations from capital gains taxes. If those locations are still operational after a decade, their appreciation will remain exempt from federal capital gains taxes into perpetuity.
Bezos’s Blue Origin has a rocket engine plant located in an OZ-designated census tract in Alabama, and Musk’s SpaceX has a launch site in an OZ-designated census tract in Texas. Sir Richard Branson is also eligible for space race-related tax benefits — his public Virgin Galactic company has sites in OZs in California and New Mexico. All of these projects were already in-process before the census tracts received OZ designation.
Their space gambits could fizzle, or course. But they could also generate lofty profits for Bezos and Musk, who have already received billions of dollars in federal space contracts between them.
OZs have come under fire this year amid mounting evidence of lax oversight and little benefit to the residents whose incomes made the tract eligible for OZ designation. For SpaceX in particular, residents of nearby Boca Chica have been displaced as Musk bought their houses last year in hopes of developing a resort for space tourists on that land.
“It would be a gross misuse of scarce resources to be subsidizing billionaires to go out into space when there are people struggling with real problems here on earth,” said Brett Theodos, who has studied OZs for the Urban Institute.
This article originally published at https://dc.urbanturf.com/articles/blog/how-the-space-race-is-finding-opportunity-in-opportunity-zones/17629.
Most Popular... This Week • Last 30 Days • Ever
Why condo fees are high in some buildings and low in others can be a difficult questi... read »
When sellers haven't quite lined up their next house before their settlement date com... read »
In this edition of First-Timer Primer, we look into the question of how to determine ... read »
The preferred mortgage product among most home buyers is the fixed-rate mortgage. How... read »
Here's what you need to know about reporting profit made from the sale of your home.... read »
UrbanTurf has compiled virtual looks at large new developments around the DC region.... read »
Virginia's homebuyer assistance programs can seem complex. This edition of First-Time... read »
A recent transaction shows that the housing market isn't cooling off everywhere.... read »
Developer Akridge has released new images of their planned Burnham Place development ... read »
The new development will also have a nearly 20,000 square-foot public plaza.... read »
With this weekend's DC houseboat tour a day away, UrbanTurf thought it only fitting t... read »
President Obama travels to Denver this morning to sign the stimulus bill that has bee... read »
In this week's installment of Ask An Agent, a reader wonders if there is a rule for h... read »
As The Wharf prepares to begin construction, DC's houseboat community heads to its ne... read »
In this week's installment of Ask An Agent, a reader asks a fairly common question th... read »
DC Real Estate Guides
Short guides to navigating the DC-area real estate market
We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!
Intro guides for first-time home buyers
Awesome and unusual real estate from across the DC Metro