Dr. Ben Carson
Secretary of Housing and Urban Development
SALT Conference Remarks
Las Vegas, Nevada, Bellagio Hotel and Casino, May 9, 2019

As prepared for delivery. The speaker may add or subtract comments during his presentation.

Thank you, Lara, for that very kind introduction.

They say what happens in Vegas stays in Vegas, but I hope we can break that rule and take some the great knowledge exchanged at this conference back home with us.

Today, I am delighted to share HUD's vision for the future of Opportunity Zones - and to announce a new package of incentives we are unveiling to make it even easier for the private sector to get involved.

But first, I'd like to briefly explain why Opportunity Zones are so important, both to the Trump Administration and to our work at HUD. While we are proud to be presiding over an incredible period of historic highs in employment, job creation, and financial growth, we are committed to making sure that every American shares in this "Great Economic Revival."

Opportunity Zones were created under the 2017 Tax Cuts and Jobs Act, to spur private investments into economically distressed communities through powerful tax incentives.

These incentives allow a new investment vehicle, called "Qualified Opportunity Funds," to invest capital gains into projects situated in those neighborhoods of America who most need our help. Investors can defer and reduce their tax liability on capital gains quite dramatically by investing the realized gains in new construction, rehabilitation, or businesses expanding in those areas. In some cases, the capital gains tax can be reduced all the way down to zero.

But Opportunity Zones are also designed to serve local communities for the long-term. Only investors who commit capital for five, seven, and ten years receive the benefits. For these neighborhoods, that means new growth becomes consistent growth and new jobs become steady jobs.

The result is that Opportunity Zones aren't some small, incremental measure - they represent massive action with one motto in mind: "If you invest in the distressed, everyone does best."

At the outset of their creation, Treasury Secretary Steven Mnuchin predicted that $100 billion of private capital would be attracted to underserved communities as a result of Opportunity Zones. Some pundits thought that forecast was overly optimistic, but like so many other milestones eclipsed by this Administration, it's a figure we are already closing in on fast. For example, the National Council of State Housing Agencies announced last month that its Opportunity Zone Fund Directory had expanded to nearly $24 billion dollars in anticipated investments. Of those $24 billion dollars, 91 percent of funds plan to invest in multifamily residential, student housing, mixed-use, hospitality, or other commercial developments. And nearly 60 percent of funds plan to invest in affordable and workforce housing or community revitalization.

This much-needed medicine is already showing its potent impact.

Today, nearly 35 million Americans - including 2.4 million HUD-assisted individuals - live in Opportunity Zones, located in all 50 states and five U.S. territories. We regularly hear glowing reports from city officials that anticipated investments in Opportunity Zones have helped preserve or attract new economic development in their localities. Data from the online real estate database Zillow shows that growth rates for property sales prices in selected vulnerable communities - which were formerly negative - flipped to a positive growth rate of 20 percent following Opportunity Zone designation.

Further, counties with a larger presence of Opportunity Zones are showing faster wage growth than those with a smaller presence. Prior to the creation of Opportunity Zones, there was no difference in these counties' wage growth, suggesting both a causal and palpable connection this initiative has toward rebuilding communities and restoring hope across America.

To ensure Opportunity Zones reach their full potential, last December, President Trump established the White House Opportunity and Revitalization Council, which I have the privilege to chair. The Revitalization Council consists of members across 16 Federal agencies and Federal-State partnerships, where we have the mission to make better use of public funds in the revitalization of economically distressed communities.

As of now, the Council has identified more than 160 programs that could increase targeting to Opportunity Zones through grant preference points, loan qualifications, reduced fees, and eligibility criteria modifications. We are also conducting a listening tour of urban, rural, and suburban Opportunity Zones throughout the nation to incorporate input from community leaders, entrepreneurs, and investors - that way, the voices of the American people are always reflected in the Council's work.

FHA Announcement

Those efforts lead me to direct the work HUD is doing to maximize the impact of Opportunity Zones.

Today, I am delighted to officially announce that the Federal Housing Administration - or "FHA" - is unveiling a new package of incentives to encourage multi-family property owners to invest in developments located in Opportunity Zones across the country.

The FHA is part of HUD's Office of Housing, and is the largest mortgage insurer in the world. The FHA maintains an active insurance portfolio of more than $1.3 trillion [dollars]. Each year, it helps more than a million homebuyers achieve the dream of sustainable and affordable homeownership of single-family homes, while its insurance programs for multifamily properties support the availability of more than 300,000 affordable rental units, including for seniors and people with disabilities.

The new incentive package effective today has two components:

  1. First, the FHA is significantly reducing the application fees paid by owners that apply for certain multifamily mortgage insurance programs for apartment buildings located in Opportunity Zone neighborhoods; and
  2. Second, the FHA is designating teams of senior underwriters to review applications in Opportunity Zones and ensure the most attentive and timely processing.

Reduced Application Fees

More specifically, applicants to three of the FHA's multifamily mortgage insurance programs will be eligible for significantly lower application fees - also known as the "exam fee" - when applying for a mortgage or loan on a property in an Opportunity Zone. These three programs are:

  1. New Construction and Substantial Rehabilitation;
  2. Urban Renewal and Concentrated Development; and
  3. Purchase or Refinance of Existing Multifamily Property.

The new savings on exam fees will lower the cost of building in Opportunity Zones.

For what we call "broadly affordable" transactions - meaning at least 90% of the units are Section 8 or deemed affordable under the Low Income Housing Tax Credit program - the exam fee will be cut from the current $3 per thousand of the requested mortgage amount to $1 per thousand. With this change, the average-sized "broadly affordable" development will have its rate cut from roughly $71,000 to roughly $24,000 -which is an average savings of about $47,000 per application.

For Fmarket rate" and "affordable" transactions - "affordable" meaning at least 10% of the units are Section 8 or deemed affordable under the Low Income Housing Tax Credit program - the FHA will reduce exam fees from $3 [dollars] per thousand to $2 [dollars] per thousand dollars of the requested mortgage amount. This change will reduce rates for the average-sized "affordable" or "market rate" development from roughly $71,000 to roughly $47,000-causing an average savings of about $24,000 per application.

When more investors can apply for benefits in Opportunity Zones, more investors can supply benefits in Opportunity Zones. And that's exactly the intention of today's Notice.

Designated Senior Underwriters

The FHA will also be designating teams of senior, seasoned underwriters to process applications specifically in Opportunity Zones to ensure expert and efficient review.

Motivated by concerns we heard that the speed of the FHA approval process could sometimes be a bottleneck to applying for FHA benefits in Opportunity Zones, today's Notice takes feedback from the investment community to heart and translates it into action.

These FHA incentives, combined with the preference points HUD already offers grantees for activities in Opportunity Zones, show how this Administration is maximizing the power of public-private partnerships to never forget - and always lift up - our nation's "forgotten men and women."

In the months ahead, we will continue to listen to the voices of both housing stakeholders and Americans from every background and all walks of life, to implement any actions that can improve Opportunity Zones for everyone.


When people call America the "Land of Opportunity," they are not simply referring to a slogan - they are describing one of our nation's founding beliefs and guiding ideals. Every street in every city, every stretch along every country road, has the power to be a zone where opportunity calls home.

Together, we are working to make that bold goal an everyday reality, to be shared and enjoyed by the millions of Americans that we at HUD have the honor to serve.

Thank you, and God Bless.


Content Archived: January 7, 2021