Economic Development & Trade

Enterprise Zones

Posted September 24, 2008

As originally envisioned, an enterprise zone is a specific and fairly small area of a city targeted for redevelopment on the basis of high unemployment, poverty, age of housing stock, or other evidence of economic weakness. Designation as an enterprise zone provides firms that move into the zone to create jobs with various combinations of regulatory relief and tax abatements, credits, deductions, and exemptions. Three-fourths of the states have enterprise zone programs. The attractiveness of such packages of incentives has led some states to expand eligibility for them widely, well beyond decaying inner cities. In some states undeveloped rural areas can qualify as enterprise zones, and in some states, enterprise zone incentives are available statewide. One result of extending enterprise zone benefits throughout a state is to lose the effect of targeting a particular area of the state for development or redevelopment.

The U.S. Department of Housing and Urban Development has a bibliography available on enterprise zones.

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