Trump, Kushner and LeFrak could potentially benefit from federal "opportunity zones"

Kushner also owns properties in two Maryland opportunity areas, while the Trump Organization owns a golf course in New Jersey. Kushner's family-run business and the Trump organization did not respond to requests for comment.

Richard LeFrak owns a massive $ 4 billion 183-acre development project called SoLe Mia in North Miami that is now in the middle of an area. As a new project, it could also be eligible. The Lefrak spokesperson did not respond to a request for comment. LeFrak is a longtime Trump associate who spent time with him in Mar-a-Lago. According to the New York Times, Trump asked LeFrak to build the border wall.

President Donald Trump will brag about the program at an event to be held Wednesday at the White House.

The program, created by the 2017 bill and managed by the Treasury Department, gave state governors the flexibility to name 8,700 zones as areas of opportunity. In April 2018, all zones were certified by the Treasury. The enthusiasm of the investment community has been counterbalanced by growing discomfort among housing and economic development experts that the program lacks government oversight.

The Chamber of Commerce, for its part, has been enthusiastic about the program "This program is another way to reform the tax system has kept its promise to create jobs and improve the lives of all Americans," said Caroline Harris , Deputy Speaker of the House, in a statement sent to NBC News. "The Chamber is strongly encouraged by recent regulatory guidance and looks forward to continuing to work with Treasury to maximize the economic growth potential of this initiative."

Now that Treasury has certified the zones, developers are encouraged to invest their capital gains in these neighborhoods. . Investors pay reduced rates on capital gains invested in the zones and are eligible for capital gains realized in fully tax-exempt areas.

Real estate experts are already seeing a decline in the value of some properties.

Critics pointed out that some of the designated areas were already booming and, for example, a generous program to direct billions of dollars to low-income neighborhoods could instead focus investment in communities like Brooklyn and Miami.

For example, a two-bedroom condo located in Brooklyn Heights with a private garden selling over $ 700,000 an area and – according to the Treasury – in an "economically distressed" community. According to Trulia, the median sale price of a home in Brooklyn Heights, at a subway station in Manhattan's financial district, now stands at over $ 2.3 million.

Tax legislation indicates that only census tracts with a poverty rate of 20% or more qualify. However, according to an analysis by the Brookings Institution, the Treasury Department has certified nearly one-fifth of the areas certified by provisions authorizing the designation of richer areas.

As a result, some areas are in places that are not usually associated with the sentence. "economically distressed", such as downtown Charleston, South Carolina, or an area of ​​West Palm Beach.

The latest figures already indicate new investments of $ 15 billion.

"I think all of this gives a realistic picture – Jim Costello, an economist for Real Capital Analytics, a company that did a basic analysis of the existing development in the areas."

The areas were chosen by 'State. governors with great discretion. Only 25% of the eligible areas have been approved. For example, in Kentucky, seven of Louisville's 18 poorest census tracts were not selected, according to Tim Weaver, assistant professor at SUNY Albany, who wrote a book on the effectiveness of Empowerment and Enterprise Zones.

"If the main goal was to reduce poverty, it was not the right vehicle," Weaver said. "It's like opening a fancy restaurant and giving the leftovers to the poor."

The Kentucky Cabinet for Economic Development issued a press release to NBC News stating that, to select areas of their state, they used a mapping tool and formally invited local stakeholders to participate.

In Maryland, a spokesman for Governor Larry Hogan said the governor's office had received suggestions from 12 counties, as well as local officials and developers. The spokesman said that all areas of the state were low income.

In New Jersey, "the selection of areas was done according to an objective, transparent and rigorous process based on a formula," said a spokesman for Governor Phil Murphy. , adding that the governor's office weighed income, unemployment rate and existing neighborhood investments.

The current owners of some areas may also experience an increase in the value of their properties. "The owners of these assets could benefit from an unexpected benefit, even if they do not follow the entire process of redevelopment and capital deployment of a qualified fund themselves," Costello said. "Suddenly, assets may seem a bit more valuable given the number of potential buyers who are examining these areas."

The Kushner Family and the Trump Organization Can not Benefit Directly from the Tax Relief Granted to Properties Owned in New Jersey and Maryland Prior to the Passage of the Tax Bill . However, if they had pre-existing permits to build a new development on the property, they could then create an opportunity zone fund to build and operate the building and this structure could be qualified, according to the experts. taxation.

For outside investors, a property inside areas can become more attractive.

For example, an investor could build a new restaurant on the Trump Golf Course as a separate and eligible business.

"It's a way to avoid ever having to recognize a gain on the growth of wealth," said Jay Darby, tax expert at Sullivan Law Firm. and Worcester, at an investor forum. "It's a huge deal, it's not a big deal, it's a huge deal."

There is no guarantee in the legislation that investments will benefit the community. For example, Adam Looney, Senior Research Scientist at Brookings, says the rules would allow an investor to purchase 500 addicted acres, double the value of the dependency, and qualify the investment as a tax shelter. 19659015] Trump National Golf Club of Philadelphia in Pine Hill, New Jersey Trump National Golf Club Philadelphia

Critics say the program lacks reporting conditions

For their part, officials Trump administration are showing extreme optimism.

Treasure The US Secretary, Steve Mnuchin, expects new investments of $ 100 billion, according to a press release from the agency. "We want all Americans to take advantage of the dynamic opportunities generated by President Trump's economic policies," said Mnuchin.

HUD Secretary Ben Carson is so confident that he often talks about the opportunity zone program as a solution to the affordable housing crisis. [19659009] At a hearing in March, when a question was asked in Carson about the lack of ongoing repairs in ruined public housing, he responded by talking about the tax benefit . "You are able to pool this capital and it will work extremely well," he said. "And we will already be involved in HUD with many of these redevelopment programs and will be able to guide this funding."

But nothing indicates that the government will collect or publish who invests, what type of investments are in progress or According to the Treasury Department, legislation does not require it.

"I am in the expectation of a careful attitude" said Terry Beach, director of economic development for St. Clair County, in the # 39, Illinois, which includes the economically disadvantaged city of East St. Louis. The areas of his county will compete with neighborhoods in Los Angeles and New York. Beach said he had recently met with a White House staff member to explain how the program could benefit residents of the affected areas as well as businesses that are investing.

Some Low-Income Housing Advocates Doubt, "Unless the Treasury The Ministry Quickly Establishes Regulatory Safeguards, There Is No Assurance That Low-Income People Will Benefit Significantly – Or Not At All – From areas of opportunity, "said Diane Yentel, chair of the National Coalition for Low-Income Housing.

Sen. Cory Booker, D.-NJ, says the bill was supposed to have reporting requirements.

Booker wrote the original bill with Senator Tim Scott, requesting that annual data be collected for the program starting at five

"Due to the hasty political process adopted last December to adopt the draft Republicans tax law, the essential guarantees included in the underlying legislation were removed, "said the senator in a statement sent by email to NBC News. "Now [the Treasury Department] must restore and extend the guardrails and transparency measures included in the underlying legislation. … [W] It takes a minimum of transparency and reporting."

The Treasury should propose a second set of regulations in

A Finance Ministry official told NBC News that a regulatory hearing on the program is scheduled for Jan. 10. "We will follow the same meticulous and quick process for the second set of proposed regulations," said the manager. .

But Booker is not convinced that the Treasury will restore the reporting requirement. and if the Treasury does not act, he says he will introduce a bill to correct the bill.

Tax lawyers have already found a workaround to one of the few restrictions in the program.

The bill excludes businesses from "sin". such as liquor stores, massage parlors and tanning salons, but according to tax experts, nothing currently prevents an investor from building or renovating a structure and renting premises. This means that a low-income neighborhood chosen as a zone could now be dotted with a new series of unwanted storefronts.

"These funds should be responsible for what happens in these communities," said Lori Chatman, Senior Vice President, Enterprise. Community Investment, developer of affordable housing. "We are giving up something as taxpayers – we think we should have the benefit of understanding how communities benefit and at the moment there are no reports . "

The White House and the Governor of Mississippi have not responded to the request. for comment.