Why It Matters
Idaho is pursuing federal tax incentives that could unlock investment in housing and business development across 25 communities. The Opportunity Zone designation offers significant tax breaks for capital gains reinvested in designated areas, representing a tool to spur economic growth in regions competing for private investment.
What Happened
The Idaho Economic Advisory Council has recommended 25 areas for federal Opportunity Zone designation, submitting its selections to Governor Brad Little’s office. The governor will make the final decision on which communities to propose to the U.S. Department of Treasury, with a submission deadline of September 28.
The recommendations emerged from 36 tracts submitted by Idaho cities and counties. The council ranked proposals based on their likelihood to attract investment, using data from the Urban Institute to guide the analysis. The top three recommendations are all located in Boise, while other communities including Rexburg, Moscow, Blanchard, Jerome, and Power County also received consideration but ranked lower in the assessment.
Jerry Miller, a member of the advisory council, noted that “a number of the nominations mentioned downtown and Main Street revitalization as one of their goals for having an Opportunity Zone.” This reflects a broader pattern of communities seeking to revitalize aging commercial cores and underutilized neighborhoods.
By the Numbers
25 — communities recommended for Opportunity Zone designation
36 — tracts submitted to the advisory council by cities and counties
September 28 — federal deadline for Treasury submission
700 — new housing units constructed in Idaho Opportunity Zones during the first program (per HUD Secretary Scott Turner)
4,000 — new jobs created in Idaho Opportunity Zones during the first program (per HUD Secretary Scott Turner)
The Program’s Evolution
The Opportunity Zone initiative originated in the 2017 Tax Cuts and Jobs Act enacted during the first Trump administration. Congress made the program permanent last year through the One Big Beautiful Bill Act, and simultaneously rolled out an enhanced version called Opportunity Zones 2.0, which expands incentives for rural investments and introduces a reporting requirement absent from the original framework.
A 2021 analysis by the Brookings Institution found that the first iteration of the program spurred measurable economic activity in urban areas but produced limited gains in rural regions—a gap the updated program aims to address through larger tax incentives for investments outside metropolitan centers.
Zoom Out
The Opportunity Zone concept reflects a broader shift toward using tax policy to direct private capital toward underperforming regions. The program’s mixed track record in rural areas during its initial run demonstrates the challenge states face in translating tax incentives into sustained economic development outside major cities. Idaho’s submission of communities ranging from Boise to Power County suggests an effort to capture available incentives across both urban and rural geography, though the extent to which the enhanced program’s rural provisions will change investment patterns remains uncertain.
The initiative also aligns with the Trump administration’s emphasis on economic development partnerships with states and localities, with U.S. HUD Secretary Scott Turner having traveled to Idaho with Senator Mike Crapo last year to discuss housing investment opportunities.
What’s Next
Governor Little will finalize Idaho’s proposals by the September 28 Treasury deadline. Once designated as Opportunity Zones, the selected areas will become eligible to attract capital gains reinvestment, with investors receiving tax deferrals and exclusions on gains reinvested in projects within those communities. The actual economic impact will depend on private investment decisions and the state’s ability to coordinate development efforts across the designated tracts.