Iowa's 62 Opportunity Zones — Designation, Investment and 2027 Eligibility

The Tax Cuts and Jobs Act of 2017 created Opportunity Zones, allowing each governor to designate up to a quarter of their state’s low-income census tracts. Investors who move capital gains into a fund operating in those tracts defer, and partly reduce, the tax owed on them. 8,764 tracts were designated in 2018, and qualified funds have reported $112 billion of property in them through tax year 2024.

Because eligibility required poverty, comparing designated zones against the country as a whole carries little information. The comparison used here is between the tracts a state designated and the tracts it was eligible to designate and did not.

Designation

Iowa had 242 low-income community tracts eligible for nomination and designated 61, plus one qualifying under the contiguity provision — 25.2% of the pool, against a statutory cap of 25%.

Designated tracts had a median poverty rate of 21.3%. The 181 tracts not designated had 20.7%, a difference of 0.7 percentage points. Ranked within Iowa’s own eligible pool, designated tracts sit at a mean of the 54th percentile; 50 is the value random selection would produce.

State values vary widely on this measure. Georgia’s designated tracts averaged the 81st percentile of its pool with a poverty gap of 14.4 points; Illinois and California exceeded 11 points. Iowa’s 0.7 is at the low end of the national range, with New Mexico, West Virginia and Mississippi.

Geographic distribution

Thirty-six of the 62 zones are in micropolitan or non-metropolitan counties, most of them one or two per county. Median poverty at designation was 16.7% in the non-metropolitan zones and 22.8% in the micropolitan ones, against 31.1% in the 26 metropolitan zones.

Polk County (Des Moines) and Linn County (Cedar Rapids) each contain three designated zones.

Reported investment

Through tax year 2024, qualified opportunity funds reported holding $80 million of property in Iowa’s zones. The national figure is $104.2 billion across 7,826 zones, or $13.3 million per zone. Iowa’s zones averaged $1.3 million.

58% of Iowa’s zones received any qualified investment, against 77% nationally. Of the $80 million reported, $10 million was in rural zones.

Comparing only tracts whose boundaries were unchanged by the 2020 census redraw, poverty in Iowa’s designated tracts fell 2.4 percentage points between the 2011–2015 and 2020–2024 surveys, against 4.1 points in the tracts not designated. Median home values rose 44.3% and 55.8% respectively. These are raw differences between groups that were not equivalent at baseline and do not identify the effect of designation.

National context

Ranked nationally by investment received, the top fifth of zones averaged $78.0 million each and the bottom fifth $158,000, a ratio of about 490 to one. Poverty and unemployment rates are close to flat across the five groups; house values, education levels and renter share differ.

Treasury’s data also compares zones that later received investment with those that did not, using the change between the 2008–2012 and 2013–2017 surveys, both periods preceding designation. Median house values rose 7.4% in zones that would later be funded, against 2.7% in those that were not. Glancy and co-authors (2026) attribute about two-thirds of the increase in Opportunity Zone construction to the selection of tracts where development was already planned.

2027 eligibility

The One Big Beautiful Bill Act made the incentive permanent on a ten-year cycle, with a new round of designations from 2027, and changed eligibility in three ways. The income ceiling fell from 80% of the area benchmark to 70%. The poverty route gained a 125% income cap. And the benchmark itself changed to the CBSA median family income for every tract in any core-based statistical area, replacing the previous “greater of state and metro” test; in 26,882 tracts the new benchmark is lower than the old one. The eligible pool falls from 31,680 tracts to 25,332.

Matched to the new universe, 25 of Iowa’s 62 zones — 40.3% are not eligible, against 26.8% nationally. Nine of the ten Iowa designated tracts with the lowest poverty rates at designation are among them.

College enrolment

Iowa City, Ames, Cedar Falls and Grinnell are in counties containing designated zones. Student populations raise measured poverty rates above the level of household hardship in a tract, which would affect the figures above if designations were weighted toward student tracts.

Defining a student tract as one where 25% or more of residents are enrolled in college or graduate school, 2 of Iowa’s 61 designated low-income zones qualify (3.3%), against 18 of the 181 not designated (9.9%). Excluding student tracts from both groups, median poverty is 20.5% among designated tracts and 19.3% among those not designated — a difference of 1.2 percentage points rather than 0.7.

Data limits

There is no public tract-level investment data. It derives from confidential taxpayer returns (IRS Forms 8996 and 8997), so Treasury publishes it only by state, tract type and income quintile. Iowa’s $80 million is a state total and cannot be allocated to individual zones. A further $7.8 billion of the national $112 billion was reported without usable location information.

Sources, the eligibility reconstruction and its validation, and the limits of the analysis are set out in the methodology.