Why are so many hotel chains and property developers eyeing low-income neighborhoods right now? It has to do with changes that came from the tax overhaul of 2017. That overhaul offers some incentives for investments that are made in low-income areas around the country. Close to 9,000 low-income areas are involved and hotel developers have taken notice. In fact, some areas that had been largely ignored by hotel developers up until 2018 are now being viewed as opportunity zones.
The new Moxy in the Williamsburg neighborhood of Brooklyn is a perfect example of what developers can do in low-income areas when they are given a little bit of incentive. Close to $125 million is being invested to create this 203-room property. In addition, the same developers behind the Moxy project are also looking into the possibility of investing $500 million to develop new apartments in the Bronx. The Moxy brand is actually part of the Marriott family. You can think of it as the young, wild and carefree sibling of the classic Marriott brand. Ultra-trendy Moxy hotels offer a high-energy atmosphere for each guest. In fact, guests are handed drinks with their room keys. Moxy properties also offer Wi-Fi access, modern designs and designated game areas. It’s probably a little bit too much for some travelers. However, guests do get to take advantage of the perks of the Marriott Bonvoy program when booking stays at Moxy properties.
Most people would see the development of new hotels and residential complexes in low-income areas as a good thing at first glance. However, the reality is a little bit more complicated than that. Many critics are already vocalizing their concerns regarding what the futures of the opportunity zones created by President Trump’s tax overhaul could look like. Some feel that encouraging developers and businesses to move into low-income areas will only speed up the gentrification of some communities. That could be bad news for residents because real estate prices will spike and essentially drive out the local population. The loss of neighborhood identities is already a big concern in cities all over the world due to the popularity of Airbnb and similar platforms.
Will the tax overhaul in the United States inadvertently ruin some very beloved neighborhoods in cities around the country? It’s probably too early to tell as of now. It’s also entirely possible that many developers would have moved into low-income neighborhoods simply due to the fact that the economy is having a bright moment and development opportunities are abundant.
[Image Source: Wikimedia/ Alex Proimos]