Inside OZ 2.0: Key Ideas In Play, With Jill Homan

What would an Opportunity Zones 2.0 look like—and what do investors actually want?

Jill Homan from the America First Policy Institute joins the show from the site of The Yellow Brick Road To QOZ 2.0 Event in Park City, UT, to discuss the results of a new investor survey and explore the leading proposals on the table for OZ legislation in 2025.

Guest: Jill Homan, America First Policy Institute

About The Opportunity Zones Podcast

Hosted by OpportunityZones.com founder Jimmy Atkinson, The Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in the Opportunity Zones industry.

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Episode Summary

In this episode of The Opportunity Zones Podcast, host Jimmy Atkinson is joined by Jill Homan, managing partner at Pinnacle Partners, and senior fellow at the America First Policy Institute’s Center for American Prosperity. The conversation explores the future of the Opportunity Zones (OZ) policy, based on findings from a newly conducted investor sentiment survey by OpportunityZones.com. With 2026 fast approaching—the current sunset date for key OZ tax benefits—Jill and Jimmy discuss whether the program should be extended, restructured, or replaced by a revamped OZ 2.0 initiative.

Opportunity Zones: A Legislative Crossroads

Jimmy sets the stage by emphasizing that 2025 will be a critical year for Opportunity Zones. With tax reform on the agenda and both chambers of Congress having passed budget resolutions that open the door to a reconciliation package, OZs may be included in a broader tax bill. If not, the existing program could sunset after December 31, 2026, creating urgency for legislative action this year.

Jill agrees, noting that many stakeholders are asking not only whether OZs will be extended, but what the next version of the program might look like. She emphasizes the importance of maintaining the momentum of the OZ initiative, which has already attracted billions of dollars in investment to underserved communities and created tens of thousands of housing units and jobs.

Survey Results: What Do Stakeholders Want?

Jimmy shares highlights from a recent investor survey conducted by OpportunityZones.com. One of the key questions was whether the OZ community would prefer to see:

  • A simple extension of the current OZ program, or
  • A full renewal and redesign, i.e., OZ 2.0.

The results were surprisingly close:

  • 58% of respondents preferred a full redesign of the program,
  • 42% favored a straight extension.

Jill unpacks the implications of these findings. She sees the split as evidence of the dual nature of the OZ community: many want certainty and continuity, while others are hungry for improvements that make the incentive more accessible, especially for smaller operators and projects in rural areas.

Why the 2026 Deferral Benefit Feels “Used Up”

One of the main investor frustrations in 2025 is that the temporary deferral of capital gains, one of the three pillars of the OZ incentive, is nearly exhausted. Jimmy explains that anyone who invests capital gains in a Qualified Opportunity Fund (QOF) in 2025 will only defer the tax for one year (until the 2026 tax year, payable in 2027). That’s a steep drop from the original 7-year deferral window investors enjoyed early in the program.

This has created the perception that the deferral benefit is now “worthless,” especially given that investments made in 2026 will provide no deferral at all. Jill and Jimmy both agree that while the deferral was a helpful tool early on, the 10-year tax-free growth benefit has become the dominant driver of OZ investing today. Any future policy should focus on reinforcing that long-term incentive.

What Could OZ 2.0 Look Like?

The conversation then shifts to what an “OZ 2.0” might include. Drawing on the survey data and her own policy work, Jill outlines several ideas that have gained traction among stakeholders and think tanks:

  • Rolling Deferral Windows: Rather than tying the tax deferral to a fixed deadline (like 2026), a future OZ program could allow investors to defer taxes on gains for a fixed period (e.g., 2–3 years) after realizing them, regardless of the calendar year.
  • Non-Capital Gain Eligibility: The current program only allows capital gains to qualify for OZ tax benefits. Some proposals suggest expanding eligibility to include ordinary income or allowing blended structures.
  • Fund-to-Fund Structures: Allowing Qualified Opportunity Funds to invest in other QOFs could unlock greater capital aggregation and streamline compliance, particularly for institutional investors.
  • Affordable Housing and Rural Bonuses: Many stakeholders want stronger incentives for rural and workforce housing investments, including potentially enhanced tax benefits, low-income set-asides, or new investment caps and thresholds.
  • Simplified Rules for Operating Businesses: Jill highlights that the current OZ compliance regime can be overly complex for small business owners and non-institutional operators. Simplifying the rules around working capital, ownership tests, and asset qualifications would allow more businesses to benefit.

Jill emphasizes that the goal of OZ 2.0 should be to improve the effectiveness of the incentive without overcomplicating it. The simpler the rules, the broader the adoption.

Permanence vs. Sunset: What’s the Right Timeline?

Another key policy question is whether Opportunity Zones should be made permanent or remain subject to a sunset timeline. Jill favors either full permanence or a structure that allows for rolling renewals every 10 years. She notes that programs with hard sunsets often create artificial surges of investment activity right before expiration, followed by steep drop-offs. A permanent or rolling framework would provide greater certainty for long-term planning and encourage sustained capital flows.

Jimmy agrees, observing that the current OZ sunset in 2026 has created a level of investor hesitation. Many sponsors are unsure whether to launch new funds or projects if the timeline is uncertain.

The Importance of Storytelling and Advocacy

Jill reminds listeners that the OZ program has always had bipartisan origins and remains popular on both sides of the aisle. Still, she stresses the importance of storytelling and advocacy in shaping future legislation. Policymakers are more likely to support a program when they hear compelling, real-world examples of OZ capital driving meaningful impact—especially in operating businesses and rural developments.

She encourages fund managers, investors, and community leaders to:

  • Reach out to their members of Congress.
  • Submit success stories to national advocacy groups.
  • Participate in coalitions and events like the Opportunity Zones Working Group, AFPI, and OZ Insiders.

What’s Next for 2025?

Both Jill and Jimmy agree that the coming months will be pivotal for OZ policy. With budget reconciliation now a possibility, Opportunity Zones could be included in a broader tax package alongside an extension of the 2017 Tax Cuts and Jobs Act.

If that happens, a range of policy options are on the table—from simply pushing the current deferral deadline to 2028, to implementing a redesigned OZ 2.0 with new eligibility rules and enhanced incentives.

Jill urges OZ stakeholders to stay engaged throughout 2025, especially as key legislative proposals begin to emerge in the second and third quarters of the year.

Conclusion

This episode offers a detailed and data-driven look at where the OZ industry stands—and where it may be headed next. With meaningful survey insights, thoughtful policy commentary, and practical strategies for advocacy, Jimmy and Jill paint a comprehensive picture of what Opportunity Zones could look like in their next chapter.