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Economics in Brief: Congress Nearing Deal on Second Stimulus

Also: Finger-pointing about a New Markets Tax Credits deal, and President-elect Biden’s plans to reform Opportunity Zones.

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Are Second Stimulus Checks On Their Way?

Congress appeared to be nearing a compromise for a $900 billion COVID-19 aid package that includes a second, smaller stimulus check, the AP reported.

The package includes $300 billion for businesses, including more Paycheck Protection Program money (a program that has been fraught with controversy and mismanagement almost since the beginning). It also would include $600 checks to Americans, though as with the first round of stimulus checks, millions of Americans didn’t receive a check, either because their income was so low that they didn’t file tax returns and weren’t able to apply for the stimulus, or because they are undocumented, related to an undocumented immigrant, or incarcerated.

The first round of stimulus checks were expected to stimulate the economy, but many people spent their first check on essentials like food and bills, according to Bureau of Labor Statistics data reported by CNBC.

Also in the bill: $25 billion in rental relief and $10 billion for the Postal Service. Removed from the bill was $160 billion for state and local governments.

Biden Outlines Opportunity Zone Reform Plans

President-elect Joe Biden has praised Opportunity Zones, but is likely to reform them once he takes office, National Real Estate Investor reports.

On his campaign website, Biden notes that he’d require more transparency from Opportunity Zone investors, on a project’s impact on poverty rates, housing affordability and job creation. He also would require that tax breaks would only be authorized if a project “clearly” had those benefits to a community. And he promises to provide incentives for Opportunity Zone funds to team up with local nonprofits or community organizations.

At least a handful of industry experts to whom National Real Estate Investor spoke said they welcomed the proposed changes.

“I think you should question the motivations of anyone who looks for less transparency in any situation,” Joan Kramer, co-founder and principal of Los Angeles-based Mountain Pacific Opportunity Partners LLC, which provides capital for Opportunity Zone projects, told the publication. “Why wouldn’t you want transparency? That is the key for us with our investors, and it should be a key for anybody involved with the program.”

Why Washington, D.C. Is Sending $6 Million to Los Angeles Instead of to a Local Theater

Facing a “use it or lose it” deadline, the D.C. Housing Authority Board of Commissioners voted last week to send $6 million in New Market Tax Credits to a community hospital in Los Angeles, the Washington City Paper reports. City officials are trading blame for who is responsible for the District missing out on the credits, which were expected to help redevelop the city’s first movie theater for Black patrons. The Strand, which opened in 1928, has fallen into disrepair, though officials have talked about redeveloping it for more than a decade.

The city could have reallocated the $6 million to a local project, but neither the proposed Strand developers nor the city said they could find any local projects to fund. So, as the City Paper notes, “D.C.’s loss is L.A.’s gain.”

On the other side of the country, Martin Luther King Jr. Community Hospital, in the Willowbrook neighborhood of L.A., will be using the money to develop an “integrated healthcare delivery system for South Central Los Angeles.”

This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter.

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Tags: washington dccovid-19congressopportunity zonesnew markets tax creditstimulus package

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