Pennsylvania’s New Investment Map Leaves Kensington Out

This month Pennsylvania put out a draft map of the places that will get federal tax breaks for new investment over the next ten years. Most of Kensington is not on it.

Opportunity Zones are the tool. When someone sells a business, stock, or real estate and makes a profit, they owe tax on that profit. If they put the profit into a fund that builds or buys property in a named area, the tax is delayed. After five years, part of it is forgiven. If they stay in for ten years, the new profit they make is not taxed at all. The map decides where the money goes.

Philadelphia had 82 of these areas in the first round. The new draft has 44. Parts of Kensington, Fishtown, and Brewerytown that had the break in 2018 lose it. The Northeast had about six. It now has one, on the Tacony waterfront.

These areas still meet the rules. Congress made the rules stricter this year. Many Kensington tracts still pass, with family incomes well under the new limit and poverty rates well above the line the law sets. They lost their place anyway.

The state can only pick 218 areas out of 871 that qualify. Philadelphia alone has 219 that qualify. Each pick is a choice about which places get help and which do not.

Reading picked its areas as a team. It lined up land ahead of time and went from four areas to six. In Tacony, a developer with plans for an $80 million marina worked with local officials and kept his area on the map. In Rutland, Vermont, the city started early, made its case to the state, and kept both of its areas. The places that had people whose job was to fight for a spot got one. The places that did not got left out.

Being left out lasts ten years. These picks run for a decade. In that time, the homes, shops, and mixed-use projects the state says it wants most will be harder to pay for in the areas that lost the break.

The program has real flaws. The tax break goes to the investor, not to the people who live in the area. In the first round, too much money went to places that were already doing well. By the end of 2024, these funds held $112 billion, and the top 1 percent of areas took 42 percent of all the investment. No one tracked what residents got out of it. Congress fixed the tracking rules this time. The fix for bad targeting is better targeting. It is not cutting the poorest areas of the state’s biggest city out of the program.

We need to ensure that we do keep it real with areas like Kensington, which should be in the opportunity zone because it is one of the parts of the country that needs it the most. We cannot leave Kensington without the opportunity zone tax credit.

Ten spots are still open. The Governor sends the final list on October 28. For each open spot, the state should ask two things: is the need deep, and is someone ready to build? Kensington can say yes to the first. The lenders, builders, and groups who work there need to prove the second one fast, in writing, the way Reading did.

These picks run ten years. They say which neighborhoods the state thinks are worth investing in. Kensington is worth investing in.

I urge the governor and the department of economic development in Pennsylvania to ensure that Kensington is in the opportunity zone map for the 2.0 version.