Opportunity Zones are at a critical juncture—and Capitol Hill is listening.

On June 4, 2025, OpportunityZones.com and Capital Square co-hosted the Opportunity Zones & Multifamily Investing Summit in Richmond, VA. In a live panel discussion during the event, national policy leaders and real estate experts come together to unpack the next chapter of OZ legislation, share new housing impact data, and debate how the program can be refined before its 2026 sunset date.

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

At the Opportunity Zone & Multifamily Investing Summit—co-hosted by OpportunityZones.com and Capital Square in Richmond, Virginia—Jimmy Atkinson moderated a powerhouse panel discussion featuring top voices in OZ policy, legislation, housing economics, and real estate investment. With Congress actively debating the future of the Opportunity Zones (OZ) incentive as part of the 2025 tax reconciliation bill, the stakes for investors, fund sponsors, and local communities couldn’t be higher.

This episode captures the full recording of that panel, offering a front-row seat to the most important OZ conversation happening anywhere in the country right now.

Panelists

• Jimmy Atkinson (Panel Moderator) – Founder and CEO of OpportunityZones.com
• Shay Hawkins – Tax counsel to Sen. Tim Scott
• Emily Lavery – Federal tax lobbyist at Fulcrum Public Affairs; formerly with Sen. Scott’s office
• Catherine Lyons – Director of Policy & Coalitions at Economic Innovation Group (EIG)
• Louis Rogers – Founder and Co-CEO of Capital Square
• Jay Parsons – Rental housing economist

Setting the Stage: Why Now?

The Opportunity Zones incentive, created in the 2017 Tax Cuts and Jobs Act, is currently set to sunset on December 31, 2026. However, the House of Representatives has included OZ reforms and an extension in its 2025 budget reconciliation bill—opening the door to significant program updates, a fresh round of zone designations, and the possibility of permanent status.

This panel focuses on:

• What’s in the current House bill.
• What changes may emerge from the Senate.
• The case for permanence and smoother transitions.
• Data-backed impact on housing production.
• What investors and fund managers should be doing right now.

Shay Hawkins: Inside the Legislative Process

Shay Hawkins opened the panel with a detailed briefing on the current status of tax legislation on Capitol Hill. As tax counsel to Senator Tim Scott, the original Senate champion of Opportunity Zones, Shay is closely involved in crafting OZ provisions in the budget reconciliation process.

Key insights from Shay:

• The House bill includes a 7-year extension of OZs but ends current zone designations two years early to streamline administration.
• The bill lowers the AMI (area median income) threshold for eligible tracts from 80% to 70% and removes “contiguous” census tracts.
• A new 30% step-up in basis is proposed for rural OZ investments, along with a reduced substantial improvement threshold (from 100% to 50%).
• Up to $10,000 of ordinary income could be invested, but Sen. Scott seeks higher limits and clarity that this refers to after-tax income.
• Interim gains, fund-to-fund structures, and affordable housing flexibility are top priorities for Senate negotiators.
• Reporting and transparency language may get stripped by the Senate parliamentarian, due to lack of direct budgetary impact.

“Permanence for the policy is Senator Scott’s top priority. We definitely would not want to undermine existing investments in opportunity zones or potential fundraising by cutting off the existing zones two years early.”

Emily Lavery: Stakeholder Unity and Practical Realities

Emily Lavery represents a broad coalition of OZ stakeholders and has spent years walking the halls of Congress advocating for reforms. She highlighted both alignment and friction between stakeholders and lawmakers in this rapidly evolving environment.

Highlights from Emily:

• There is broad stakeholder consensus around permanence, transition frameworks, and interim gain relief.
• The House’s early zone sunset and capped ordinary income provision ($10K) are impractical, potentially causing a near-term capital freeze.
• Reporting remains important for investor confidence but faces procedural hurdles under the Byrd Rule.
• The need to unlock fund-to-fund structures is growing, especially for supporting operating businesses and multi-asset strategies.
• Interim gains continue to inhibit reinvestment, capital recycling, and business development.

Emily also previewed that further Senate developments may occur quickly, with potential new language emerging by early July.

“Realistically and practically, the number one thing that we wanna see is permanence without a question. That is a big deal.”

Catherine Lyons: Housing Supply, By the Numbers

Catherine Lyons presented preliminary quantitative research from EIG showing the transformative impact Opportunity Zones have had on housing production—especially in high-need, low-income areas.

Data-driven takeaways:

• From 2019 through Q1 2025, OZs added 790,000+ new residential addresses.
• More than 353,000 of those units were directly caused by the OZ incentive itself.
• OZs now account for 32% of all new units across low-income eligible tracts.
• That’s 9% of all U.S. housing starts during the same period, up from 6.5% pre-OZ.
• The average cost to taxpayers per OZ-supported unit is just $23,000—compared to $400K+ for other federal programs (e.g., LIHTC).

Catherine emphasized that this housing impact came despite no pre-approval process, minimal bureaucracy, and only partial program maturity due to regulatory delays and the COVID-19 pandemic.

“And we hear a lot of the critiques of this policy saying, ‘Well, it’s just incentivizing things that would have already happened anyway or in places that would have already received this investment.’ This essentially puts that argument to bed. We’re showing here that at least in the use case of housing, OZs are actually causing a great deal of new housing happening in these places that would not have happened otherwise.”

Louis Rogers: Ground-Level Market Realities

Capital Square’s Louis Rogers offered a practitioner’s view from the trenches—drawing on Capital Square’s portfolio of multifamily OZ developments across the Southeast.

Notable impact stats:

• Capital Square’s OZ projects have created thousands of construction jobs, revitalized underutilized parcels, and added hundreds of millions in taxable value to cities like Richmond, Charleston, Raleigh, and Knoxville.
• OZs have enabled Capital Square to refinance stabilized projects, returning capital to investors well ahead of the April 2027 tax deadline.
• Local governments—including Richmond’s current and former mayors—have become pro-OZ advocates, citing job creation and minimal school burdens.

Louis also warned that rural incentives, as proposed, may be economically unrealistic in some regions, especially where development economics don’t pencil out.

“Realistically, if you want to build maximum housing, you need to provide an incentive where people want to live, where there are people who live, who want to live.”

He advocated for one-asset, one-fund structures, simpler underwriting, and local developer engagement—while also supporting a binding contract-based transition rule for any new round of designations.

Jay Parsons: A Win-Win for Investors and Renters

Economist Jay Parsons reinforced that OZs not only help investors but also produce real public benefit, especially when conventional development pipelines have slowed.

Observations from Jay:

• New construction has collapsed nationwide, making OZ-backed projects even more critical for housing supply and affordability.
• OZs have empowered local and mid-size developers to compete with national merchant builders, thanks to longer hold periods and flexible capital.
• Long-term, patient capital in OZs helps stabilize neighborhoods, avoids speculative flipping, and fosters more thoughtful development.

Jay praised OZs as a rare alignment of incentives—an example of how public policy can attract private capital while delivering measurable public good.

“I think this is a real chance to be impactful… delivering housing for people who need it in areas that need it. That’s a worthy cause… also one that has been beneficial to investors as well. So I look at it as a win-win for communities, for renters, and for investors and developers.”

Top Themes from the Audience Q&A

The audience raised several key questions during the final portion of the session:

1. Can the current inclusion rules reduce investors’ tax liability if fair market value drops? Yes. As written, investors pay tax on the lesser of the original gain or fair market value of the OZ asset at the time of inclusion.
2. Will the proposed 30% basis step-up apply to urban zones? No. The current proposal targets only rural tracts, based on the House’s definition.
3. What about transition relief for deals closing now, with little time to stabilize before 2026? All panelists agreed this is a critical issue, and that transition rules must account for near-term deals already underway.
4. What’s the best path for deploying capital in 2025-26 if the map changes? Panelists advised sticking with existing zones for now, since new designations may not be ready until late 2026 or 2027.

Key Takeaways

• OZs are working. The data supports massive housing growth, investor participation, and community revitalization.
• The program needs more time. Stakeholders overwhelmingly support permanence or at least a longer ramp for the next phase.
• Reform is essential. Fund-to-fund flexibility, rural incentive realism, and interim gain fixes are on the table.
• Transition clarity matters. A poorly timed cutoff or zone reshuffling could cause a costly capital freeze in 2025–26.
• Advocacy works. The OZ community has earned a seat at the table—and the next 6–8 weeks will be critical.

Conclusion

This panel offered one of the most robust, timely, and insightful discussions on Opportunity Zones to date. From tax counsel and Hill veterans to housing researchers and boots-on-the-ground developers, the range of voices provided a holistic picture of where OZs have been—and where they’re going.

Whether you’re an investor, fund manager, community developer, or policymaker, now is the time to engage, advocate, and prepare. The OZ program’s future is being written right now.