Texas, California Lead Nation on “Opportunity Zone 2.0”

The upcoming reboot of the federal Opportunity Zone program is expected to feature significantly fewer zones nationwide, but Houston is emerging once again as a top beneficiary.

An analysis of Census data and eligibility rules showed that the Houston metropolitan area could qualify 631 census tracts under the revised program, the Houston Business Journal reported. Harris County alone accounts for 526 of those — more than five times the number it received in the original Opportunity Zone rollout in 2017.

Texas is projected to have nearly 2,500 eligible census tracts, second only to California, which has about 2,750. The populations of California and Texas last year were about 39.5 million and 31.3 million, respectively.

With 526 eligible tracts, Harris County could host 21 percent of the state’s zones, while the broader Houston region would make up over a quarter. Dallas County would have 297 eligible tracts; San Antonio’s Bexar County would have 155; Fort Worth’s Tarrant County would have 143; and Austin’s Travis County would have 96, the outlet found.

The program allows investors to defer capital gains taxes if they park those profits in a fund that pours money into designated distress areas.

“Opportunity Zone 2.0,” part of the Trump administration’s federal tax and spending law, known as the One Big Beautiful Bill Act, tightens eligibility by lowering income thresholds and eliminating the “contiguous tract” provision. Experts predict the number of nationwide zones could shrink by more than 20 percent, increasing competition and lobbying pressure ahead of the July 1, 2026, deadline for governors to finalize their selections.

“Houston was beautifully checkerboarded with designated zones,” said Brian Dethrow, a Dallas-based partner at law firm Jackson Walker. “But this time, rural areas are expected to see more focus.”

Despite its real estate-heavy reputation, the program can support diverse business models — including logistics, services and manufacturing — if they are based and active in designated zones.

The program is set to open for investment on January 1, 2027.

The first round of opportunity zones resulted in housing being built in New York City at market rate and not in low-income areas, New York University’s Furman Center found recently.

—Rachel Stone