Budget Reconciliation Begins: A Green Light For New OZ Legislation

Budget reconciliation is underway, and new Opportunity Zone legislation now officially has a green light to move forward.

Plus, Novogradac has released new QOF survey data, and OZ Insiders is gearing up to host a networking dinner in Los Angeles.

About OZ NewsHour

OZ NewsHour covers the key stories happening right now in the world of Opportunity Zones. Hosts Andy Hagans and Jimmy Atkinson discuss the powerful trends that investors, fund managers, real estate developers, and industry professionals need to know. If it’s a must-know development in the Opportunity Zone world, we cover it here.

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Episode Summary

Andy Hagans and Jimmy Atkinson lead off the episode with major breaking news: the budget reconciliation process is now underway, giving Congress a path to pass new tax legislation along party lines—including a potential renewal and expansion of Opportunity Zones. Jimmy recounts how the House and Senate passed their respective budget resolutions, culminating in the House narrowly approving the Senate’s amended resolution (216-214), unlocking the legislative process.

This development was the subject of Jimmy’s most viral LinkedIn post ever. While the road ahead includes significant political negotiation—especially with budget hawks in the House Freedom Caucus—the reconciliation framework is now in place. House Speaker Mike Johnson has set a bold target: deliver a tax bill to President Trump’s desk by Memorial Day.

What Is Budget Reconciliation?

Andy and Jimmy break down how reconciliation works. It’s a filibuster-proof process that allows legislation to pass the Senate with a simple majority, provided every element of the bill directly impacts federal revenue or spending. This is the same method Republicans used to pass the original 2017 Tax Cuts and Jobs Act, and it’s the playbook they’re using again.

While May is an optimistic deadline, both hosts agree that year-end is a more realistic goal. Without action, millions of Americans will see lower take-home pay beginning in January 2026, making year-end a political and economic pressure point.

Key Takeaways from the OZ 2.0 Summit

Jimmy provides an on-the-ground report from the recent Yellow Brick Road to QOZ 2.0 Summit in Park City, Utah, hosted by Greenberg Traurig and the American Association of Opportunity Zones. The event gathered top stakeholders—including real estate developers, fund managers, family offices, attorneys, and accountants—for a three-day discussion focused on the future of Opportunity Zones.

Jimmy shared results from a survey conducted just prior to the event:

  • 44% of respondents said they would prefer a simple extension of the current OZ program.
  • 56% want a full renewal—a brand new OZ 2.0 program.

The breakdown suggests that many current stakeholders prioritize an extension to support existing projects and deferred gains, while others see value in a long-term reboot.

Potential OZ 2.0 Policy Ideas

Jimmy outlines several proposed enhancements currently under discussion in D.C. and within the industry:

  1. Rolling deferral period – Instead of a hard cutoff in 2026, each investor would receive a 7-year deferral based on their investment date.
  2. Allowing non-capital gains (after-tax dollars) to receive OZ benefits (excluding deferral).
  3. Fund of funds structure – Permitting QOFs to invest in other QOFs.
  4. Rural investment incentives – Enhancing the program’s impact in underserved rural areas.
  5. Affordable housing incentives – Supporting projects that address the housing shortage.
  6. Relaxing the substantial improvement rule – Reducing the current 100% improvement requirement.

Jimmy and Andy agree that even if only some of these ideas are included, it would represent a meaningful leap forward. As Jill Homan advised at the Park City summit, an extension alone would be a win, and enhancements would be the cherry on top.

Community Q&A Highlights

Several viewer questions were addressed live on the stream:

  • Aaron asked about the specifics of OZ legislation. Jimmy clarified that no official draft bill has been released, but a marker bill could be introduced any day now.
  • Barrett asked how budget scoring would be impacted if all the proposed enhancements were included. Jimmy noted that congressional scoring is “more art than science,” and acknowledged that allowing non-capital gains could significantly increase the program’s fiscal impact—potentially a sticking point in negotiations.

OZ Insiders Events and Masterclasses

Jimmy recapped a successful OZ Insiders dinner held in Park City during the summit. The next insider meetup will take place June 2 in Manhattan Beach, California. He also previewed the May 12 OZ Insiders Masterclass, led by Peter Lawrence and Jason Watkins from the Novogradac OZ Working Group, which will focus on draft legislation and inside-the-Beltway updates.

Capital Raising Trends

The hosts reviewed Novogradac’s latest Q1 2025 equity report, which showed $810 million in new QOF equity—the second-best quarter since Q3 2023. Jimmy noted a subtle uptick in momentum after a flat period and estimated total equity raised by QOFs since inception to be around $160 billion, based on Novogradac’s data capturing only 25–33% of the market.

Investor hesitation tied to pending legislation may be slowing some flows, but Jimmy reiterated his advice not to delay if investors have current gains: the tax incentive remains powerful today and there’s no guarantee of improvement.

Executive Orders: Critical Minerals and Maritime Policy

Jimmy and Andy discussed two recent executive orders from President Trump:

  • One promotes domestic mineral production, tying into a recent OZ Podcast episode featuring Gil Michel-Garcia of EVelution Energy, who is building a cobalt processing plant in an Arizona OZ.
  • The second order focuses on restoring America’s maritime dominance and explicitly cites Opportunity Zones as a model for newly proposed Maritime Prosperity Zones.

These moves signal White House support for using the OZ policy model to drive industrial and defense-related investment within U.S. borders.

Picks of the Month

Jimmy’s pick: An article by Blake Christian in Business Facilities Magazine, which highlights OZs’ growing impact on housing. OZ census tracts now account for 20% of new market-rate multifamily development, despite housing just 10% of the U.S. population.

Andy’s pick: Retail Real Estate’s Resilience: Five Years After The Shock (MastiffEquity.com). Andy reflects on the resilience and resurgence of retail real estate, emphasizing that post-COVID consumer behavior is driving demand for in-person shopping and experiences.