Opportunity Zone Projects Hindered by Inflation, Higher Rates

Sean Lyons has enough equity for his multifamily and student housing projects, which are funded largely by opportunity zone investors. But the price of lumber he needs for construction has risen 16% in the past year, and the work has taken longer than expected.

His company has assumed the cost difference to keep the tax-advantage projects on track, said Lyons, of real estate developer Jackson Dearborn Partners. But for opportunity zone projects in general, he said, the economic and supply chain challenges mean developers could wait for stronger market signals before they launch new projects.

“Sponsors are more inclined to ...