Idaho’s Economic Advisory Council has recommended 25 communities for federal Opportunity Zone designations, a program offering tax breaks designed to spur investment in housing and economic development projects across the state. Governor Brad Little’s office will make the final selection before the state submits its choices to the U.S. Department of Treasury by September 28.
The advisory council selected the 25 recommendations from 36 proposals submitted by Idaho cities and counties seeking the tax incentives. Communities chosen for top consideration include Boise’s three highest-ranked areas, along with Rexburg, Moscow, Blanchard, Jerome, and Power County. The selections were based on analysis of which areas are most likely to attract private investment, using data from the Urban Institute.
How Opportunity Zones Work
Opportunity Zone designations provide federal tax benefits to investors who direct capital into qualifying economic development and housing projects within designated areas. The program, originally created by the 2017 Tax Cuts and Jobs Act during the first Trump administration, was made permanent by Congress through the One Big Beautiful Bill Act in 2023.
The current iteration, known as Opportunity Zones 2.0, offers enhanced incentives for rural investments compared to urban designations, reflecting a push to direct development capital beyond major metropolitan centers. The program includes new reporting requirements on how investments are being deployed and their economic impact.
Idaho’s Track Record with Opportunity Zones
Idaho has seen measurable results from its existing Opportunity Zone investments. According to HUD Secretary Scott Turner, Idaho communities within current Opportunity Zones have attracted investment leading to approximately 700 new housing units and 4,000 new jobs created.
However, economic research on the program’s effectiveness shows mixed results. A 2021 Brookings Institution analysis found that Opportunity Zone investments have generated increased economic activity in urban areas but have not consistently produced the same level of economic stimulus in rural communities. Despite this finding, the enhanced rural incentives in Opportunity Zones 2.0 are intended to address that gap.
Local Focus on Downtown Revitalization
Several Idaho communities included in the latest round of nominations have emphasized downtown and Main Street revitalization as key goals for their Opportunity Zone applications. According to Jerry Miller, State Department of Commerce Rural Services Manager, “A number of the nominations mentioned downtown and Main Street revitalization as one of their goals for having an Opportunity Zone.”
This reflects a broader strategy among Idaho towns to use the federal incentive program to attract private capital to aging commercial cores, a challenge facing many rural and small communities across the Panhandle and throughout Idaho. Communities like Post Falls, which has experienced a 21% population surge since 2020, may view the designation as a tool to manage growth and direct investment strategically.
What Comes Next
Governor Little will review the advisory council’s 25 recommendations and determine which communities the state will formally submit to the U.S. Department of Treasury. That decision must be finalized by the September 28 deadline.
Once designated by the federal government, Opportunity Zones provide a ten-year window for investors to benefit from capital gains tax deferrals and exclusions when reinvesting profits in qualifying projects. The combination of federal tax incentives and new rural investment multipliers under Opportunity Zones 2.0 positions Idaho communities to compete for development capital in a competitive landscape.
For North Idaho communities considering participation in future opportunity zone programs, the federal designation can unlock private investment that might otherwise flow to larger metropolitan areas or other states with similar incentive structures.