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Opportunity Zones Bring New Investment Potential to East Central Indiana

September 28, 2026

East Central Indiana communities have another important tool to help attract investment and turn long-term development plans into reality.

As Indiana prepares for the next generation of federal Opportunity Zones, every county in the Forge ECI region that had an eligible census tract has been selected for Opportunity Zone designation.

For our communities, that matters.

Opportunity Zones are designed to encourage private investment in areas where additional capital can help spur economic growth. While the program operates through the federal tax code, its impact can show up in very tangible ways at the local level—from housing and downtown redevelopment to business expansion, entrepreneurship, industrial development and the reuse of vacant or underutilized properties.

For East Central Indiana, the new designations create another opportunity to connect investors with projects that can strengthen our communities for years to come.

What Is an Opportunity Zone?

The Opportunity Zone program was originally created by Congress in 2017 as an economic development tool for encouraging long-term private investment in economically distressed communities.

The concept is relatively straightforward. Investors who have eligible capital gains can reinvest those gains through a Qualified Opportunity Fund, or QOF, which then invests in qualifying businesses or properties located within designated Opportunity Zones.

In return, investors may receive federal capital gains tax benefits when program requirements are met.

The goal is to encourage capital that might otherwise be invested elsewhere to flow into communities where new housing, businesses, redevelopment and other projects can create economic opportunity.

The program was updated and made permanent through federal legislation enacted in 2025. Under what is often referred to as Opportunity Zones 2.0, states will select a new group of qualifying census tracts every 10 years.

Indiana’s new Opportunity Zones will take effect beginning January 1, 2027, and remain designated for 10 years.

Why Investors Pay Attention to Opportunity Zones

The incentive can make projects within an Opportunity Zone more attractive to investors because qualifying investments receive special federal tax treatment.

Under the new program, investors may defer taxes on eligible capital gains reinvested through a Qualified Opportunity Fund for up to five years. After the deferral period, investors can receive a 10 percent reduction in the deferred capital gains tax liability.

The incentive becomes even more significant for long-term investment. Gains generated by qualifying Opportunity Zone investments held for at least 10 years can be exempt from federal capital gains tax.

The updated program also places greater emphasis on rural communities. Qualifying rural Opportunity Zone investments can receive an enhanced 30 percent basis step-up, compared with 10 percent for other Opportunity Zone investments.

That rural emphasis is particularly relevant for regions like East Central Indiana, where smaller cities and rural communities are actively working to attract new housing, businesses and redevelopment.

Why This Matters for East Central Indiana

Opportunity Zone designation doesn’t automatically bring development to a community.

What it does is give communities another tool to help make good projects more attractive to private investors.

That distinction is important.

Across East Central Indiana, communities are already investing in downtown revitalization, housing, industrial sites, entrepreneurship, infrastructure, quality of place and the redevelopment of vacant and underutilized properties. Opportunity Zone designation can add another layer to those efforts by helping connect local projects with investors looking for qualifying opportunities.

Imagine a vacant downtown building that a developer wants to transform into apartments and commercial space. An underused industrial property that could become home to a growing manufacturer. A housing development that fills an identified need in the community. Or an entrepreneur ready to expand a business and create jobs.

When those projects are located within an Opportunity Zone and meet federal requirements, the tax incentive can become part of the investment equation.

That can help communities move from having a good idea to having a project that is more financially attractive to potential investors.

Building on Work Already Underway

One of the most important lessons from the first generation of Opportunity Zones is that designation works best when it is paired with strong local planning and projects that are ready for investment.

Indiana’s own guidance for the new program emphasizes that point. The state looked for areas where Opportunity Zone designation could complement local planning, housing strategies, site readiness and coordinated economic development efforts.

That aligns closely with work already happening throughout East Central Indiana.

Through READI and READI 2.0, local economic development initiatives and private investment, communities across the region have spent years identifying priorities and building partnerships around projects that can support long-term growth.

Opportunity Zones can complement that work rather than replace it.

A community with a redevelopment plan, available property, infrastructure, local partners and a clearly identified need is in a much stronger position to take advantage of Opportunity Zone designation than one simply waiting for an investor to arrive.

A Stronger Incentive for Rural Investment

The enhanced incentives for rural Opportunity Zones could be especially meaningful for East Central Indiana.

Federal changes to the program provide a larger basis step-up for qualifying rural Opportunity Zone investments. The IRS has also reduced the substantial-improvement requirement for certain properties located entirely within rural Opportunity Zones, lowering the threshold from 100 percent of a property’s adjusted basis to 50 percent.

In practical terms, those changes are intended to make it easier and more attractive to invest in rural properties and communities.

For smaller East Central Indiana communities competing for investment, those additional incentives may help projects attract attention that would otherwise flow toward larger metropolitan areas.

From Designation to Opportunity

Having an Opportunity Zone is only the beginning.

The next step is making sure investors, developers, businesses and property owners understand what is available within those zones.

That means identifying development-ready properties, connecting potential investors with local opportunities, continuing to improve infrastructure and quality of place, and making it easier for people interested in East Central Indiana to understand where opportunities exist.

It also means thinking strategically about how Opportunity Zone investment can support broader community goals.

The strongest projects will be those that create value not only for investors, but also for the communities where the investment occurs—whether through new housing, jobs, business activity, redevelopment or stronger neighborhoods.

Another Tool for Moving East Central Indiana Forward

There is no single program that transforms a community.

Economic development happens when many pieces come together: strong local leadership, private investment, available sites, infrastructure, housing, workforce, entrepreneurship, quality of place and a willingness to collaborate.

Opportunity Zones add another piece to that puzzle.

Having eligible East Central Indiana counties represented in Indiana’s next generation of Opportunity Zones gives our region another way to compete for private investment and another reason for investors to take a closer look at the opportunities already taking shape here.

At Forge ECI, our work is about connecting communities, resources and opportunities across the region. Opportunity Zone designation provides another avenue for doing exactly that—helping turn investment potential into projects that can strengthen East Central Indiana for the long term.

For investors, developers and businesses considering their next opportunity, the message is simple: East Central Indiana is ready for investment.