AURORA, Colo. — As Colorado continues to grow, developers and investors are searching for ways to take advantage of Opportunity Zones.
Opportunity Zones are economically distressed neighborhoods identified by the federal government as areas where investors may be eligible for tax incentives for choosing to invest in those neighborhoods.
“Traditionally, what you normally see is investors will come in and scrape the old buildings to build brand new luxury homes and brand new apartment buildings, which is great but then sometimes triggers the negative side effect of gentrification,” said Keller Williams Commercial Real Estate broker Michelle Thomas. “Then, people that live there can no longer afford to live in the neighborhoods that they grew up in.”
Recently, Thomas has sold several properties in North Aurora to investors who want to change that trend.
“Smaller investors are purchasing buildings and instead of scraping them, they are rehabbing them and remodeling, Then they are leasing them to the existing community,” Thomas said.
Thomas said many residents are willing to pay more for the nicer housing and many investors are willing to accept Section 8 housing vouchers which pays landlords rent prices that are higher than market rate.
“It's a benefit for investors because they're getting a great return, great cash flows for investing into these communities. Then the existing tenants… now have a nice and clean remodeled place and they can still stay in their neighborhoods,” Thomas said.
Thomas said redevelopment does not have to mean gentrification and when investors approach Opportunity Zones in a way that keeps the area affordable for existing residents, both investors and the community can benefit.