Opportunity Zones 2.0: Changes, Challenges and Opportunities Ahead

Brielle Scott for Market Share Blog | June 1, 2026

As the “opportunity zones (OZ)” program enters a new phase, investors, developers and advisors are preparing for what many are calling “opportunity zones 2.0.” In a recent episode of NAIOP’s Inside CRE podcast, Angel Rice and Dave Sobochan of Cohen & Co., one of the top tax and accounting firms in the U.S., discussed how the program is evolving, where uncertainty remains, and what the transition means for commercial real estate.

A Program Designed to Unlock Capital

The original opportunity zone program was created to encourage investment in low-income and economically distressed communities by offering tax incentives to investors who reinvest capital gains into Qualified Opportunity Funds (QOFs).

Rice explained that Congress recognized that taxpayers had millions of dollars sitting in unrealized capital gains that were not being deployed because investors wanted to avoid triggering tax. The OZ program aimed to redirect that capital into communities that historically struggled to attract investment.

The program offers three core tax benefits:

• Deferral of capital gains taxes,
• A potential reduction in taxable gains after a five-year or seven-year hold, and
• Exclusion of appreciation on the OZ investment after 10 years

 

With OZ 2.0, the program is now permanent, with taxable gains eligible for a rolling five-year deferral period.

The Market is Strong, But in Transition

Despite regulatory uncertainty, the opportunity zone market remains active.

Sobochan described the program as “wildly successful,” noting that investment activity continued even before initial regulations were finalized. However, the market is now facing a complicated transition between OZ 1.0 and OZ 2.0.

“There’s really no bridge between OZ 1.0 and OZ 2.0,” Sobochan said, adding that investors are evaluating alternative structures to potentially get the benefits of both worlds.

Even so, developers are still moving projects forward. As Sobochan emphasized, “This is an incentive, so the deal must work on its own merits to attract investor attention. [The OZ program] becomes the icing on the cake.”

New Census Tracts Will Reshape the Map

One of the biggest changes under OZ 2.0 is the redesignation of opportunity zone census tracts.