TAMPA — After Central Park Village was demolished in 2007, the Tampa Housing Authority replaced lost public housing with four apartment blocks by allowing co-developer Bank of America to sell tax credits to finance construction.
But the urban renewal project known as Encore struggled for years to attract other private investment for hotels, retail businesses and market-rate apartments for which there were no tax credits.
Now, construction cranes are visible on both sides of Hank Ballard Street, with about 500 market-rate apartments under construction. Both projects are partly funded through opportunity zones, a tax incentive created in the 2017 Tax Cuts and Jobs Act.
U.S. Department of Housing and Urban Development Secretary Ben Carson touted the benefits of the incentive program during a 45-minute tour of Encore on Friday. He was accompanied by Tampa Mayor Jane Castor and leaders of the Housing Authority.
Carson, who ran unsuccessfully for the Republican presidential nomination in 2016, hailed the redevelopment project as an example of a successful public-private partnership. Encore covers 12 blocks on the edge of downtown Tampa.
“It’s a holistic redevelopment of the entire area,” Carson said after viewing exercise facilities in one of the community’s two senior buildings. “This is the way urban renewal should be done.”
Opportunity zones are intended to draw private investment into low-income and mainly urban neighborhoods. Companies who invest in development projects in designated areas can defer paying capital gains taxes on that money.
More than 8,700 zones have been created nationwide, based on recommendations from governors in 50 states. Those zones are home to about 35 million residents, according to federal government data. They have been successful in getting people to invest in areas “that normally are neglected,” said Carson, who cited the incentive when asked to refute criticism that President Donald Trump is a racist.
“If those are racist acts, show me more racism,” he said.
But the program has been criticized for providing tax breaks where they weren’t needed, such as a plan a build luxury apartment towers next to a marina for superyachts in West Palm Beach. The site was designated an opportunity zone by former Florida Gov. Rick Scott.
In just two years, about $10 billion has been invested in opportunity zones, according to a recent study by the Urban Institute, a nonprofit that provides research into best practices for community development. It found that investors seeking the greatest returns were favoring upscale projects such as luxury housing, rather than affordable housing in lower-income neighborhoods.
“The incentives were intended to foster equitable development outcomes — such as by creating quality jobs, affordable housing, community-oriented amenities like grocery stores, and improved quality of life for low-income people,” the report states. “Our evidence suggests they need to be redesigned so government dollars are allocated effectively and help project sponsors achieve those outcomes.”
Leroy Moore, the chief operating officer of the Housing Authority, said he spoke with Carson during the tour to stress the importance of other federal incentives, such as the federal Hope VI program, which helped to pay for the redevelopment of Belmont Heights, and the Choice Neighborhood Initiatives, which helped to fund Encore.
Encore is part of a long-established trend away from traditional public housing, which concentrated low-income families in one neighborhood. Carson was particularly interested to learn that after build-out, the community housing, hotels and stores are projected to create 1,000 jobs, he said.
“We need diversity of people, and that’s the market-rate folks,” Moore said. “And we need diversity of uses, like grocery stores and office buildings, so that they have jobs on site.”