CARW

The Commercial Association of REALTORS Wisconsin

CARW Joins HUD Panel on Funding Opportunity Zone Projects

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CARW President & CEO Tracy Johnson spoke on a panel at the U.S. Department of Housing and Urban Development’s Opportunity Zones conference in Milwaukee on September 17. The event was hosted by HUD’s Center for Faith. Tracy’s panel, “Funding Projects in Opportunity Zones,” also featured Jake Caelwaerts of CLA, Elizabeth Staton Idleman of Northwestern Mutual, and Nina Johnson. The panelists discussed how Opportunity Zone tax incentives draw investment into distressed communities, the challenges of attracting investors, especially for rural projects, and what developers look for in joint venture and operating partners. Milwaukee was one stop in a national series of HUD conferences. The next one is in Grand Rapids, Michigan, on October 15.

The conversation comes at an important time. Congress made Opportunity Zones permanent in 2025, and the next round of the program, known as “OZ 2.0,” takes effect January 1, 2027.

What’s changing

Investors who put capital gains into a Qualified Opportunity Fund can still get three tax benefits:

  • Deferral: taxes on reinvested gains are deferred for up to five years.
  • A reduced tax bill: the taxable gain drops by 10%, or 30% for funds that invest in rural zones.
  • Tax-free growth: if the investment is held for 10 years or more, its appreciation is permanently exempt from federal capital gains tax.

The rules for which neighborhoods qualify are stricter this time, and that hits Wisconsin hard. The state can nominate about 77 census tracts, down from 120 in the first round. That 36% drop is one of the steepest in the country.

Where Wisconsin stands

The Wisconsin Economic Development Corporation (WEDC) collected applications from municipalities, counties, tribes, and other public entities from June 11 to July 31. WEDC and WHEDA are now reviewing them, and priority goes to communities planning workforce housing. The governor’s nominations are due to the U.S. Treasury by October 28, after an automatic 30-day extension. Treasury is expected to publish the final map before the new zones take effect January 1, 2027. They will stay in place through 2036.

What it means for members

With fewer zones and a focus on housing, the tracts Wisconsin picks will shape where investment goes for the next decade. Members active in workforce housing, rural development, or Milwaukee’s central city should keep an eye on the final map.

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