Will targeted tax breaks spur investment in Lexington’s new ‘Opportunity Zones’? City leaders hope so

What do Cardinal Valley, downtown, Hamburg East, Midland, and the Red Mile have in common?

They’ve all been labeled what are known as Opportunity Zones. Those are areas where potential investors can take advantage of tax benefits related to capital gains.

Kevin Atkins, chief development officer with the city, told WKYT the main goal is to provide a shot in the arm to housing construction in those five sections of town.

“We hope to see housing in all these areas and we worked with our division of planning as we looked at the zones that had the potential to qualify for opportunity zones to see the areas most likely to provide the needed housing,” he said.

And the tax breaks are not limited to affordable housing. Projects can also extend to single family homes, apartments and commercial space, entertainment developments and new businesses.

Devin Richardson with the Kentucky Cabinet for Economic Development said the newest round of opportunity zones will be different due to 2025’s “One Big. Beautiful Bill.” He said states will now be able to effectively make the zones permanent if they choose.

“It’s not going to be a one-off program anymore as it was in the 1.0 program. States are going to be able to redesignate the opportunity zones every 10 years from this point forward,” he said during an update earlier this year. “So it’s going to be long lasting rather than just a one-off sort of initiative.”

New language about the 2.0 version of Opportunity Zones, including maps and an address lookup tool, will be appearing on Lexington websites.

The new zones are slated to take effect January 1st.