Which states stand to benefit the most from the new Opportunity Zone criteria?

Just 19% of the approximately 25,000 census tracts potentially eligible for Opportunity Zone (OZ) designation are “More likely to attract OZ investment, with larger impact,” per the Urban Institute’s new OZ Designation Tool.1 The majority (68%) of potentially eligible tracts were found to be “Less likely to attract OZ investment,” while the remaining 13% were determined likely to attract capital regardless of OZ designation. Breaking the data down further, this article showcases state-level aggregations of the percentage of potentially eligible tracts across each categorization to paint a picture of which states stand to benefit the most from the OZ program based on the count of tracts likely to receive investments.

All data used in this article is from the Urban Institute’s OZ Designation Tool, housed within their “Data to Inform 2026 Opportunity Zone Selections” data file. The Urban Institute created the tool to be used by governors’ offices and localities across the decision-making process to make informed decisions on their next nominations and generate the most economic impact in their regions while taking into consideration the need of each tract.

An intro to Opportunity Zones and overview of the data

Opportunity Zones (OZs) are a designation for census tracts and a tool providing tax incentives for investments to spur economic growth and job creation in distressed areas across the United States.

Created under the Tax Cuts and Jobs Act of 2017, the OZ program was originally scheduled to sunset for capital gains realized after December 31, 2026. The One Big Beautiful Bill Act, signed into law on July 4, 2025, instead updated and made the OZ program permanent.

Governors may select up to 25% of their states’ eligible tracts, with a 25-tract minimum, to be nominated as OZs. There are approximately 84,500 census tracts across the 50 states (excluding Connecticut, which is not included in the Urban Institutes’ tool), Puerto Rico and Washington, D.C., with an average of approximately 1,660 in each state, as of 2020. California has the most with over 9,000, and Wyoming the least at 160; most states have more than 1,000.

The Urban Institute’s OZ Designation Tool includes a list of over 25,000 tracts likely to be eligible under the updated legislation.2 Thus, of the over 84,000 census tracts nationwide, approximately 30% may be designated as OZs. Note that the U.S. Department of the Treasury will eventually release the official list of eligible tracts, and is also the body that certifies OZ nominations.  

Beyond identifying these potentially OZ-eligible tracts, the Urban Institute has categorized tracts into three categories: "Less likely to attract OZ investment," "More likely to attract OZ investment, with larger impact," and "Likely to attract capital even without OZs." Refer to the data notes section at the end of this article for more details on how the Urban Institute categorized tracts into these categories.

SSTI has compiled a breakdown of these categories for all tracts with available data, aggregated at the state level, as shown in Figure 1 below. Data is separated into quintiles for each category. The category shown can be toggled with the dropdown beneath the title.

Figure 1: State breakdown of Urban Institute OZ Designation Tool data by bucket

Approximately 68% of potentially eligible tracts fall into the “Less likely to attract OZ investment” category. The percentages, however, vary by state by state; Utah (39%), Hawaii (46%), and Idaho (49%) have the lowest percentage of these tracts and are the only states under 50%. In comparison, West Virginia (80%), Kentucky (80%), New Mexico (82%), Mississippi (83%), and Puerto Rico (89%) have the highest percentage.

States like Minnesota (35%), Utah (33%), Washington (33%), Delaware (31%), Nevada (30%), and New Hampshire (30%) have the highest percentage of tracts in the “More likely to attract OZ investment, with larger impact” bucket. These states all fall far above the national value of 19%, but while some fall above the national value others must fall below; Hawaii (13%), Kentucky (13%), New York (12%), Mississippi (12%), and Puerto Rico (10%) have the lowest percentage of tracts in the category.

That is not to say that these tracts are unlikely to receive investments, but rather that the OZ designation may be less impactful. Hawaii and New York, for example, have the largest percentages of tracts within the “Likely to attract capital even without OZ designation” bucket at 41% and 31% respectively.

Other states, such as New Mexico (4%) and New Hampshire (2%), as well as Puerto Rico (1%), have the lowest percentage of eligible tracts in the “Likely to attract capital even without OZ designation” category, far below the national value of nearly 13%.

For more details on the exact tracts within each state, the categorization of all potentially eligible census tracts, alongside other socioeconomic data and indicators, can be found within the Urban Institute’s OZ Designation Tool housed within their “Data to Inform 2026 Opportunity Zone Selections” data file.

Data notes

Every potentially eligible census tract was sorted into the above categories by the Urban Institute using six indicators,3 grounded in actual Ohio OZ investment patterns. These Ohio data, collected by the state, were used to build the model, supplementing the current lack of public data at the census tract level nationally.  

As an example of the Ohio data in action, aggregate capital flows were given a higher weight in the model than the other five indicators, as it was the most predictive of Ohio's OZ investment into tracts. The full methodology and user guide can be found on the Urban Institute’s website.

Note that the OZ Designation Tool does not include data for tracts in Connecticut, American Samoa, Guam, the Northern Mariana Islands, or the U.S. Virgin Islands.

The "Likely to receive private investment without OZs" bucket includes tracts above the 90th percentile of all tracts nationwide in any of the following indicators: 2012-2016 aggregate capital flows per household; 2019-2023 median household income; 2019-2023 median home value; or 2019-2023 median gross rent. Tracts with more than 15% of the population aged 18-24 were also included in this bucket to account for college-age students, which would otherwise distort the other criteria, such as poverty rate and median household income.

Beyond classifying all potentially eligible tracts, the Urban Institute provides data on a variety of useful socioeconomic characteristics for each tract. All data is available for download on the Urban Institute’s website.

This page was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.