Revitalizing Birmingham: The Effect of Opportunity Zones on Urban Renewal

Revitalizing Birmingham: The Impact of Opportunity Zones

On a particularly sweltering Alabama day, where the heat feels almost tangible, Alex Flachsbart speaks with an urgency that reflects his passion for urban renewal. As he navigates the streets of central Birmingham at a brisk pace, he frequently pauses to highlight the transformative victories achieved in the area. Each stop reveals a story of neglected public housing, abandoned factories, and dilapidated department stores—all of which are being revitalized into modern apartments and inviting office and retail spaces.

“This was one of Birmingham’s elusive projects,” Mr. Flachsbart remarked, gesturing towards a recently renovated former Red Cross headquarters, now transformed into 192 rental units. This significant development was made possible through a substantial tax incentive introduced in 2017, aimed at attracting investors to economically distressed neighborhoods. This initiative has garnered bipartisan support, with former President Donald J. Trump publicly praising it as one of his administration’s proudest economic achievements. During a recent address at a National Association of Black Journalists conference, he referred to the program as “one of the greatest advancements for Black workers and entrepreneurs.”

However, the benefits of these opportunity zones have not been evenly distributed. As Mr. Flachsbart continues his tour of revitalized projects in downtown Birmingham, it’s evident that investment has largely bypassed the historically African American northwest quadrant. In this area, numerous developable lots and vacant structures have seen little of the financial influx that has energized other parts of downtown.

“The opportunity zone was a helpful nudge, but it was already at a tipping point,” noted Mr. Flachsbart, who has orchestrated several successful projects as the chief executive of a nonprofit organization known as Opportunity Alabama. “There is a distinct boundary at about 17th Street that seems to separate the flow of capital.”

As Birmingham serves as a case study, it reflects the broader implications of how investment has—or has not—permeated the designated opportunity zones over the past six years. With the expiration of this incentive looming in 2026, Congress is now closely examining its impact and the future of this economic policy.