Leaders must ensure opportunities for locals, not just tax breaks for wealthy investors

The inclusion of several Washougal parcels in Governor Jay Inslee’s Opportunity Zone designations is a piece of positive economic news for a town that often struggles to keep up with other Clark County areas in the post-Recession era.

To qualify as an Opportunity Zone, a census tract had to have an individual poverty rate of at least 20 percent and a median family income of no more than 80 percent of the area median.

Washougal had several parcels that qualified. Among the governor’s picks: Washougal’s “E” Street, from Sixth Street to 28th Street; portions of downtown Washougal including the Pendleton Woolen Mill and Bi-Mart locations; and the Port of Camas-Washougal Industrial Park, which includes the Steigerwald Commerce Center.

Being included as an Opportunity Zone doesn’t mean money falls from the sky. In fact, there is absolutely no guarantee that the zones will stimulate the local economy or attract any investment at all.

A bipartisan provision championed by Republican Sen. Tim Scott, of South Carolina, and Democrat Sen. Cory Booker, of New Jersey, that made its way into the 2017 tax overhaul bill, the Opportunity Zone program was the brainchild of the Economic Innovation Group, a 5-year-old Washington D.C.-based public policy organization seeking to “address America’s most pressing economic challenges.”

The idea for the zones is to entice investment into low-income areas that haven’t bounced back from the Great Recession of 2008. More than half of the areas qualifying for the program have fewer jobs and fewer businesses today than they did in 2000. The Opportunity Zones program offers federal tax incentives for investors willing to put money into these areas.

That doesn’t mean that investors will automatically swarm to Washougal and the Industrial Park. As Steve Glickman, the Economic Innovation Group’s co-founder recently told a reporter for CityLab, “the opportunity zone incentive is not a silver bullet.”

Instead, city and port leaders will need to position Washougal and its Opportunity Zones as worthy of new investment, while guarding against both gentrification and investments that turn the town into yet another bland, American strip mall.

In an ideal world, local leaders would use the Opportunity Zones to enhance everything that our “Gateway to the Gorge” has going for it — proximity to one of the world’s most beautiful natural areas, a strong sense of community among the families who have called Washougal home for generations, a burgeoning art scene, great walkability in the town’s downtown core, and its closeness to the thriving Portland/Vancouver metro region.

In a Feb. 26, 2018 guest column for the National League of Cities’ CitiesSpeak.org, addressed to city leaders, Economic Innovation Group co-founders Glickman and John Lettieri said politicians must be proactive if they want their local Opportunity Zones to be successful: “Work with your banks, business groups, nonprofits, philanthropies, and community development entities to make sure that Opportunity Funds dedicated to your city and its potential are established,” they advised.

Unlike the Clinton-era Enterprise Zones program, which had its fair share of flaws, the Opportunity Zones idea does not include language that safeguards communities against gentrification. Investors are under no obligation to provide jobs for locals or build affordable housing. Used in the wrong way, the zones could simply become another economic windfall for those at the top, letting corporations and investors avoid capital gains taxes.

Washougal and Port of Camas-Washougal leaders must try to ensure that investment revitalizes the area without displacing the very people relying on the Opportunity Zones to infuse opportunity back into their hometown.