This blog was authored by Brett Theodos and Brady Meixell of the Urban Institute.
To highlight ACS (American Community Survey) Awareness Month, the National League of Cities is spotlighting communities that have used ACS data to drive positive change in our From Data to Decisions series.
Neighborhoods are currently being selected to participate in the next decade of the nation’s largest economic development program, Opportunity Zones (OZs). Every 10 years, governors are tasked with selecting the next set of OZs from a list of eligible census tracts, which is determined using ACS data.
Eligibility
To be eligible for selection, a tract must either:
- Have a poverty rate of at least 20 percent and a median family income that does not exceed 125 percent of the median family income of its metropolitan area or state; or
- Have a median family income at or below 70 percent of its metropolitan area or state. Before the official list of eligible tracts was released in April 2026 (PDF), many states and localities already used the ACS to construct their own list of likely eligible tracts to get an early jump on their selection processes.
Submission
Designated OZs attract new investors by providing federal tax benefits to investors who roll over capital gains into projects within their boundaries. Governors must submit their OZ selections by Sept. 28 (or Oct. 28 if they request an extension), but municipalities have a seat at the table to advocate for tracts within their boundaries that need additional investment. Some states are formally requesting localities submit their recommendations. In others, local leaders are proactively reaching out to their state counterparts to advocate for selecting tracts that align with their local priorities (or avoiding tracts that do not). Localities can make the most effective case by using two key tools: ACS data and understanding their local parcels (parcels are land units that have associated information, such as fixed boundaries and recorded ownership).
“Just Right” Opportunity Zones
Local leaders should focus on finding their “Goldilocks” communities — those that are not too hot, not too cold, but “just right” as OZs. When we looked at OZ investment in Ohio (the only state with publicly available OZs data), only one in three OZs saw a single dollar of investment between 2020 and 2024. Of the state’s 328 OZs, 50 percent of OZ investments went to just nine. This means that being designated an OZ neither guarantees investment nor puts a community on equal footing with other zones. Selecting the most distressed neighborhoods may feel impactful, yet it is unlikely to result in new investment. At the same time, the hottest, fastest-appreciating markets will attract capital with or without an OZ designation. Instead, municipalities should focus on neighborhoods that both need investment and can plausibly attract it with the added incentive. Municipalities can better understand the conditions of their eligible tracts and make a case for their selection by using ACS data to understand both their current socioeconomic conditions — including key indicators such as median household income, median home value, median gross rent, among others — and the change of these conditions over time. Additionally, cities can use our tool, which considers a mix of ACS and capital flows data.
What You Can Do on Behalf of Your Municipality
Within designated tracts, OZ benefits are as-of-right for qualifying investments. The incentive is awarded without any level of government necessarily providing input or even having awareness. But localities (via states) can tip the scales toward certain project priorities based on the underlying land uses of chosen census tracts and developable parcel pipeline within those tracts. In addition to ACS data, cities can evaluate parcels ready for development to advocate for the selection of tracts where an OZs designation could potentially bring in new investment to help priority projects move forward.
As governors finalize their OZ nominations, local leaders have the rare chance to shape the investment landscape of their communities for the next decade. By pairing ACS data with on-the-ground parcel-level knowledge, municipalities can more effectively advocate to their state governments to nudge investment toward the areas where the OZ incentive does the most good and the least harm. While the program is a blunt instrument and by no means a cure-all, data-driven selections can help the next round of OZs better support places that both need investment and can put it to work.
What Does Census Data Say About Your Community?
Explore your own community’s ACS data now.
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