Established under the 2017 Tax Cuts and Jobs Act, Opportunity Zones (OZ) are a federal economic development and community development tax benefit designed to encourage long-term private investment in low-income urban, suburban, and rural census tracts. The incentive works by allowing investors to roll capital gains into a Qualified Opportunity Fund (QOF), which then deploys that capital into real estate, businesses, or infrastructure within a designated zone.

REALTORS® have a vested interest in knowing about opportunity zones in their market territories. OZ-designated areas are prime candidates for residential and mixed-use development. When investment flows into these neighborhoods, property values shift, housing stock gets built or rehabilitated, and buyers and renters gain more options in communities that have historically been underserved.

Virginia has 212 Qualified Opportunity Zones which remain in effect through 2028 (OZ 1.0). These 212 zones span the entire Commonwealth—from the urban cores of Richmond, Norfolk, and Alexandria, to rural communities in Southwest Virginia, the Southside, and the Shenandoah Valley. Cities like Danville, Petersburg, Lynchburg, and Roanoke all have designated tracts as well, giving the program both geographic and economic diversity. So far, OZ funds have been used to finance multifamily housing, commercial centers, and health care facilities, demonstrating just how broadly the tool can address community needs beyond simple market-rate development.

In 2026, the Virginia Department of Housing and Community Development (DHCD) and the Virginia Economic Development Partnership (VEDP) are actively engaging stakeholders about the 2026 OZ nomination process, gathering input to support the Governor’s decisions on which eligible census tracts to nominate for OZ 2.0 designation. Virginia has 607 census tracts that meet the OZ 2.0 eligibility requirements, and the state will nominate approximately 152 new zones for designations taking effect on January 1, 2027.

The communities that will benefit most from the next decade of OZ investment are the ones whose local voices, including REALTORS® who know the neighborhoods, show up now to advocate for the right tracts to be designated. If there’s a neighborhood in your market with underbuilt housing, aging inventory, and a population in need, this is the moment to make that case to DHCD and VEDP. Over the long term, REALTORS® can identify distressed properties within OZ tracts, connect local developers with investor clients, and help families access housing in neighborhoods being actively revitalized.

Opportunity Zones won’t solve Virginia’s housing challenges alone, but for REALTORS® willing to engage, they represent one of the most powerful levers available to help build the communities your clients want to live in.

For more information on housing, demographic and economic trends in Virginia, be sure to check out Virginia REALTORS® other Economic Insights blogs and our Data page.