Established in 2017, Opportunity Zones (OZs) are low-income census tracts where investors can make qualifying investments into new projects and enterprises in exchange for federal capital gains tax reductions.
We have recently received an update from the Ohio Department of Development (ODOD) on the designation process for OZs 2.0, which will begin later this spring. However, communities that have OZs, or are interested in having OZs considered for designation under the new process, there are steps you can be taking now to be prepared for when the process officially kicks off.
Ohio Designation Process
Governors designate tracts. States nominate eligible census tracts for federal approval every ten years. ODOD and the Governor’s Office will select tracts to submit to U.S. Treasury.
Federal Timeline. Governors can begin nominating census tracts to US Treasury on 7/1/2026.
State Timeline. ODOD will open a 30-day online portal to accept local submissions April 2026.
No automatic renewals. Current OZs are not guaranteed redesignation; existing tracts must be renominated and ODOD will review all nominations.
What can Communities do now to get ready?
Prioritize census tracts for nomination. Highlight local and regional collaboration. Align nominations with plans to emphasize how the region will work together to ensure investment in the census tract.
Connect to strategy. Show how OZ designation advances housing, revitalization, and economic goals already underway. Refer to past successes within existing or nearby OZs if possible.
Make the case regionally. Coordinate with MPOs/RPCs, JobsOhio affiliates, and economic development partners. MPOs/RPCs and the JobsOhio affiliates may be unofficially consulted by the Governor’s office.
Advance project readiness. Identify and promote real estate projects in priority tracts by sharing this vision with the community, including local elected officials and wealthy individuals who can invest in projects.
Engage local investors. Educate high-net-worth individuals and institutions on OZ 2.0 benefits.
Opportunity Zones 2.0
Now permanent. The 2025 One Big Beautiful Bill Act (OBBBA) made the program permanent and introduced major reforms.
Stricter eligibility. The low-income threshold drops from 80% to 70% of area median income; contiguous tract nominations are eliminated.
Rural incentives expanded. Larger tax benefits (30% step-up basis instead of 10% in other tracts) and a 50% reduction in the substantial improvement requirement for Qualified Rural Census Tracts.
Tax incentives remain. Five-year tax deferment on capital gains and step-up basis for investments held for five years remains from original program.
Updates to Eligible Census Tracts
Here is a map of tracts that are expected to be eligible in Ohio. The map may change slightly in Spring 2026, after new census data are released. Check back in Spring 2026.
Ohio will have ~20% fewer designated OZs due to tightened eligibility, e.g. ~258 tracts.
Our community has an OZ but hasn’t seen investment, why care now?
Stronger incentives in fewer places. Permanence and enhanced rural benefits make remaining zones more competitive and attractive.
Opportunity for legacy cities and rural areas. Local investors who understand Ohio’s markets may see renewed value in investing.
Stay Informed.
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