Hawaii Appeals Win 25 Tax Zones

Gov. Josh Green announced Thursday that Hawaii has secured federal tax incentives for 25 census tracts under the Opportunity Zones 2.0 program. The state achieved these designations through an appeal to the U.S. Department of the Treasury, a step taken because the areas were not originally eligible for inclusion in the federal program. The new zones span 19 tracts on Oahu, four on Hawaii Island, and two on Maui.

The designation process prioritized three specific goals: housing, clean energy, and economic resilience. According to the governor's office, these zones are intended to attract private capital for affordable homes and energy projects that lower costs while creating local jobs. The state aims to diversify its economy by directing investment toward healthcare, tourism, advanced manufacturing, agriculture, broadband, and film production.

No census tracts on Kauai qualified for the program, and the state could not seek an appeal there due to a lack of available census-level data. The selected Oahu areas include specific neighborhoods in Waikiki, Moliili, Chinatown, and Iwilei-Kapalama, along with sites like the McCully-Moliili Public Library and Aloha Stadium. On Hawaii Island, the designations cover parts of Hilo and North Kona, while Maui includes the Kula Makai and Lahaina Front Street tracts.

Green framed the initiative using medical analogies to describe the strategy. He stated that he has spent his career in places with scarce resources and learned that early investment in the right locations prevents future problems. He said these designations will catalyze investments to build a healthier and more affordable Hawaii for local people. The governor also noted that the program helps keep young residents in the state by providing jobs and housing.

James Kunane Tokioka, director of the Department of Business, Economic Development and Tourism, said the zones place Hawaii on the map for investors. He noted that the designations will funnel capital into projects that build lasting value, ranging from housing and healthcare to film and agriculture. The state conducted months of engagement with county leadership, federal partners, national experts, community stakeholders, and the private sector to finalize the list.

The Opportunity Zones 2.0 program offers federal tax incentives to investors who commit long-term capital to designated low-income communities. It includes additional benefits for eligible rural areas. The state expects the zones to unlock hundreds of millions of dollars in private investment across economically depressed neighborhoods. The full list of designations and a map are available at cdfifund.gov/opportunity-zones.