Opportunity Zone Next-Round Designations: A TOD-Aligned Ranking of Philadelphia's 218 Eligible Tracts

Build Philly Now — Research Memo Published: April 30, 2026

Summary

Philadelphia has 82 currently-designated Opportunity Zones from the 2017 (TCJA) round, all of which sunset on December 31, 2028. Pennsylvania will nominate up to 217 tracts statewide under the OBBB (a 28% reduction from the current 300 statewide designations) during a 90-day window from July 1 to September 28, 2026, with the new designations taking effect January 1, 2027. Philadelphia's slot count within that 217 is the Governor's call. We make the case here that the city should defend its current share — and use it more deliberately than last time.

We ranked all 218 Philadelphia census tracts eligible for Opportunity Zone redesignation or new designation under the OBBB eligibility rules, using a composite of three signals weighted equally: transit access, access to regional jobs, and recent permit and business-license activity.

We recommend 82 tracts, matching Philadelphia's existing designation count:

• 54 redesignation candidates — currently-designated, still-eligible tracts whose composite scores above the median newly-eligible tract
• 28 high-signal newcomers — the strongest newly-eligible tracts by composite

We also recommend dropping six currently-designated tracts that score below the median newly-eligible tract on our composite, and flag twenty strategic swap candidates where TOD-corridor completion, capital project pipelines, or priority public sector initiatives argue for reconsideration.

Top three redesignation candidates (composite score out of 100):

1. 42101037700 @ Temple University Station — 86.4
2. 42101011100 @ Lancaster Av & 50th St (Subway-Surface trolley) — 86.0
3. 42101014100 @ Girard Av & 11th St (Route 15 trolley) — 84.9

Top three high-signal candidates (newly-eligible):

1. 42101013702 @ Girard Av & 28th St (Route 15 trolley) — 88.6 (162 housing permits in 3 years — the most of any eligible tract)
2. 42101014700 @ Cecil B. Moore Station (BSL) — 81.4 (highest regional jobs access of any newly-eligible tract)
3. 42101010100 @ Girard Av & 61st St (Route 15 trolley) — 77.3 (West Philly trolley corridor)

Full rankings in oz_tract_rankings_full.csv.

Opportunity Zones, in brief

A short orientation for readers new to the program. If you're already familiar, skip to "The 82-tract recommendation."

What an Opportunity Zone is

The Opportunity Zone (OZ) program is a federal tax incentive that lets investors defer or eliminate capital gains taxes when they reinvest gains into businesses or real estate located in designated low-income census tracts. The mechanism: an investor sells a stock or property with a capital gain, rolls those proceeds into a Qualified Opportunity Fund (QOF) within 180 days, and the QOF deploys that capital into OZ-eligible projects. After a 10-year hold, gains on the QOF investment itself are tax-free.

The program was enacted in 2017 under the Tax Cuts and Jobs Act (TCJA). It produced 8,764 designated zones nationally — Pennsylvania got 300, of which 82 are in Philadelphia.

What changed under OBBB

The 2025 One Big Beautiful Bill Act (OBBB) extends and revises the program:

• OZs are now permanent. New designations get redrawn every ten years going forward — the next round takes effect January 1, 2027. The current (2017) zones sunset December 31, 2028.
• Eligibility tightened. A tract now qualifies as low-income if its median family income is ≤70% of state median (down from 80%). This shrinks the eligible universe nationwide.
• State allocation cut by ~28%. Pennsylvania can nominate up to 217 tracts statewide, down from the current 300. Each state has a 25-tract floor regardless.
• Rural premium added. Investments in Qualified Rural Opportunity Funds (QROFs) get a 30% basis step-up after 5 years, versus 10% for regular QOFs — a 3× tax advantage for rural OZ investments.
• Reporting requirements expanded. QOFs now have to report on jobs, housing units, and other outcomes — making the program more accountable.
• The contiguous-tract exception is gone. Under TCJA, governors could nominate up to 5% of designations as non-LIC tracts contiguous to designated low-income tracts. OBBB eliminates that flexibility. Every tract nominated must independently meet the LIC criteria; there is no path to designate a non-LIC tract regardless of its development potential or its proximity to eligible neighbors. In practice, this means high-profile non-residential redevelopment districts, Center City corridors, and any tract whose median family income is too high or whose poverty rate is too low cannot be nominated under OBBB — even if a strong development case exists. The 218 LIC-eligible tracts in this analysis are Philadelphia's entire OBBB-designable universe.

The rural premium is the most consequential change for cities. Federal capital chasing the OZ tax benefit will now skew toward rural projects all else equal. Pennsylvania's urban tracts, including Philadelphia's, have to compete with that pull. Designating Philadelphia tracts where investment can actually compound — places with transit, jobs access, and visible permit activity — is how the city defends its share of the next decade's QOF deployment.

How tracts get designated

1. Eligibility is automatic. Treasury identifies tracts that meet OBBB's income / poverty criteria from Census ACS data. In Philadelphia, that's 218 of our 408 tracts.
2. Each state's Governor nominates up to 25% of eligible tracts (217 in Pennsylvania), with input from cities and counties.
3. The U.S. Treasury certifies the nominations. Certification is essentially procedural — the Governor's choices stand.
4. Designations are valid for 10 years, then redrawn.

For Philadelphia specifically: the Mayor's office will recommend a slate to Governor Shapiro, and the Governor will decide what to nominate within Pennsylvania's overall 217-tract budget.

The 82-tract recommendation

Matching Philadelphia's existing 82-tract designation count:

• 54 redesignation candidates (top still-eligible by composite)
• 28 high-signal newcomers (top newly-eligible by composite)

Combined and ranked: ranking_bpn_82_combined.csv. Each tract's full composite, three component scores, and underlying permit / business-license / soft-site counts are in the accompanying CSVs and on the interactive map. The ranking methodology is documented in the Methodology section below.

Redesignation candidates (54 tracts)

Currently-designated still-eligible tracts whose composite scores above the median newly-eligible tract — i.e., where the data supports keeping the existing OZ status. Mean composite: 71.9 / 100. Philadelphia's 2017 designation set produced genuine winners; these are the ones worth keeping.

Six currently-designated still-eligible tracts fall below the median newly-eligible composite — see "Tracts we recommend replacing" and "Strategic swap candidates" below.

Full 54-tract list: ranking_redesignation_candidates.csv.

High-signal candidates from newly-eligible tracts (28 tracts)

The 28 newly-eligible tracts with the highest composite scores fill out the slate up to 82 picks. Mean composite: 71.5 / 100 — slightly above the redesignation set. By the numbers, these newcomers are as strong as the tracts we're recommending for redesignation.

Full list: ranking_bpn_picks.csv.

Geographic pattern: the high-signal candidates cluster along the corridors where SEPTA's heavy-rail and trolley modes already serve high-demand neighborhoods. The Broad Street Line anchors the slate from Center City's Walnut-Locust north through Cecil B. Moore, Allegheny, Erie, Hunting Park, and Olney. The Market-Frankford Line along Kensington Avenue covers Somerset, Kensington-Allegheny, and Tioga. The West Philly Subway-Surface trolleys (Routes T1–T5) — running along 40th, 42nd, 49th, 56th, 60th, 61st, and 63rd Streets, plus Chester, Woodland, and Elmwood Avenues — and the Route 15 Girard Av trolley through Brewerytown, Sharswood, and Fishtown carry the rest, with four of our top fifteen newcomers sitting along Girard alone (Tracts 137.02, 101, 110, and 112). Every one is a corridor where transit already exists, SEPTA's Trolley Modernization or other accessible-station investment is underway, and permit activity is accelerating.

Tracts we recommend replacing

Six currently-designated tracts rank below the median newly-eligible tract on our composite. The clearest tell is permit activity: the median redesignation candidate saw 75 permits and new business licenses over the last three years; the Cheltenham Station tract came in at 22. After seven years of OZ status, the composite signal points toward replacing these six with high-signal newcomers from the existing slate.

Two more currently-designated tracts (Tract 5600 / Penrose Plaza and Tract 381 / Tacony waterfront) also land below the median, but are treated separately as Strategic swap candidates below.

The six tracts we recommend dropping

"3-yr activity" below is the sum of housing permits, commercial permits, and new non-residential business licenses over the last three years. The median redesignation tract is 75.

Six high-signal newcomers that fill out the slate

The six lowest-ranked newcomers in our 28-tract high-signal set — the marginal picks paired with the six drops above:

Each comes in at composite 65–66, against 13–46 for the tracts they'd replace.

Strategic swap candidates

Our composite ranking is the baseline, but several tracts that don't make the top 28 newcomers still warrant consideration on policy grounds that the composite doesn't capture: TOD-corridor completion, capital project pipelines, and priority public sector initiatives. We flagged twenty as strategic swap candidates to consider for Philly's slate.

Most are on the IRS official LIC list and can be nominated through the standard Governor process. Two are not — Tract 30.02 (Tasker-Morris) and Tract 238 (Tulpehocken) — and would require a § 5.04 nomination by the Governor. We've published a separate near-miss screen (outputs/SECTION_504_SCREEN.md) showing both tracts pass the OBBBA LIC math under ACS margin-of-error bands; they have a clean federal eligibility case alongside the policy case below.

• Tract 391 — Lower Schuylkill Innovation Campus (newly-eligible, composite 35.7). PIDC's 40-acre Lower Schuylkill Innovation Campus — a biotech-focused redevelopment opportunity adjacent to University City, structured as two 20-acre sites — sits in this tract. PIDC has been actively marketing it for a development partnership since 2024 with a target of "thousands of family-sustaining jobs." LIC-eligible (51.9% poverty, $33.5k median household income). Our composite under-rates it because the development pipeline is currently pre-permit; OZ designation would also be one of the cleanest tools available to help PIDC close on a partnership.
• Tract 5600 — Penrose Plaza / Eastwick (currently designated, composite 35.3). Composite-weakest currently-designated tract for permit activity, which would normally place it on the drop list. SEPTA's Route T5 Trolley Modernization terminus sits at the northern edge, and the broader SW Philadelphia Trolley Mod corridor is undergoing a multi-year capital investment to replace surface flag-stops with new accessible high-platform stations. Service quality in the OZ window (2027–2037) will be materially better than current GTFS reflects.
• Tract 381 — Tacony waterfront / Tacony-Palmyra Bridge (currently designated, composite 43.7). Algorithmically in the bottom of the still-eligible set, but the case is mostly an artifact of methodology. Our composite weights residential transit access and 30-min jobs reach at 2/3 of the score, which under-rates Delaware River waterfront industrial corridors that pencil on highway, rail, and water access. Tract 381 has 120 permits and business licenses over 3 years (the highest of any drop-candidate), and the North Delaware River Greenway is now ~65% complete — the K&T Trail connector at the Tacony-Palmyra Bridge opened in 2023, with the 10-acre Borski Jr. Park breaking ground in Bridesburg next door. OZ designation pairs well with industrial real estate (the substantial-improvement test is easier to clear on industrial than residential) and with operating-business equity in manufacturers and logistics tenants.
• Tracts 25, 28.02, 30.02, 37.02, 40.01 — South Broad BSL TOD corridor (newly-eligible). Five contiguous BSL station-area tracts running south from Center City — Ellsworth-Federal, Tasker-Morris (28.02 + 30.02), and Snyder (37.02 + 40.01). Tract 28.02 in particular has 113 housing permits + 28 commercial + 31 new business licenses over 3 years (172 total — above the median redesignation tract). Pairing this group with the already-recommended Tract 9.01 (Walnut-Locust) gives South Broad a contiguous BSL TOD corridor — exactly the kind of stack that compounds federal capital with existing heavy-rail capacity. Tract 30.02 is the only one of the five not on the IRS list and would need a § 5.04 nomination.
• Tracts 179 + 188.02 — Kensington Ave / MFL corridor (newly-eligible). Tract 179 is adjacent to Tract 178 (Somerset, our #6 high-signal pick) with 111 housing permits and 53.7 acres of soft sites in 3 years. Tract 188.02 picks up the MFL corridor north toward Tioga. Together they complete the Kensington Ave corridor along the MFL between Allegheny and Somerset — the elevated stretch where Frankford-bound trains run above Kensington Avenue.
• Tracts 280 + 281 — Logan Triangle / North Broad BSL (newly-eligible). Both tracts overlap Logan Triangle, where the Parker administration has proposed a modular housing factory. Whether or not that specific project advances, these tracts complete the contiguous BSL corridor with already-recommended Tract 275 (Logan / high-signal #15) immediately south. Including them gives the city the option to support the Mayor's housing initiative if it moves forward, and the corridor-completion case stands either way.
• Tracts 238, 242, 245, 252 — Germantown Regional Rail corridor (newly-eligible). Four contiguous Germantown station areas along the Chestnut Hill West Regional Rail line: Tulpehocken (238), Queen Lane (242), Wister (245), and Washington Lane (252). Together, they've seen 176 housing permits and 60 commercial permits over 3 years, with 707 soft-site parcels (62 acres) identified. Active public-sector pipeline already in motion: the Germantown Town Hall restoration at 5928–30 Germantown Av cleared the Planning Commission, with PAID conveying the historic property to a partnership with West Powelton Development to anchor a charter school, commercial kitchen, and restaurant incubator. Designating these four as a chain gives Germantown a contiguous OZ footprint along its Regional Rail spine. Tract 238 is the only one of the four not on the IRS list and would need a § 5.04 nomination.
• Tracts 103, 131, 148 — Route 15 Girard Av trolley corridor (newly-eligible). Three additional Route 15 station-area tracts that didn't make the top 28 newcomers but pair with the four Route 15 tracts already in the high-signal slate (137.02, 101, 110, 112) to give Girard Avenue a contiguous OZ chain from Northern Liberties (Tract 131 at Girard Av & 7th St) through Brewerytown / Sharswood (Tract 148 at Girard Av & 19th St) out to West Philly (Tract 103 at Girard Av & 51st St). Tract 148 has the highest jobs-access score of any candidate in this set (0.99) — a genuinely under-rated tract.
• Tract 70 — Woodland Av & 55th St (newly-eligible). Subway-Surface trolley T1 corridor in Southwest Philly, with 230 soft-site parcels (11.4 acres) inside the tract. Pairs with the already-recommended Trolley Mod corridor tracts to extend the OZ footprint along the T1 alignment.

Where the recommendations land on the displacement-risk map

One common concern about any OZ slate is whether it accelerates displacement of existing residents. We tested our 82 recommendations against two complementary measures: The Reinvestment Fund's Market Value Analysis (absolute housing-market strength) and a tract-level analog of their Displacement Risk Ratio (price-to-income affordability) computed from public OPA sales and ACS family-income data.

Absolute market strength (MVA)

The MVA classifies Philadelphia tracts from A (strongest housing markets) to I (most distressed). If our methodology were funneling capital to Philadelphia's hottest neighborhoods, we would expect picks concentrated in tiers A and B. The opposite happens:

• Only 3 of our 82 recommended tracts sit in the strongest-market tiers (A or B).
• 48 of 82 (59%) sit in the most-distressed tiers (G, H, I) — places where investment is desperately needed and new development is far more likely to add housing supply than to bid against existing residents in absolute terms.

In absolute housing-market terms, we are not selecting Philadelphia's gentrifying frontier.

Local affordability against 2010 incomes (DRR analog)

The MVA picture isn't the whole story. The Reinvestment Fund's Displacement Risk Ratio (DRR) measures price relative to legacy residents' incomes, not absolute price. The methodological core: divide current sale prices by 2010 median family income, CPI-adjusted forward, and difference against the citywide ratio. The 2010 income baseline is what makes the metric a displacement signal — it asks whether the household living in the tract before recent price growth could still afford to buy. Using current incomes would let in-migration mask displacement, which is exactly what the metric is built to catch. (See The Reinvestment Fund's methodology brief for the full specification.)

The official block-group DRR isn't published as open data. We computed a tract-level analog using The Reinvestment Fund's methodology — 2023–2025 OPA residential sales divided by ACS 2006–2010 median family income, CPI-adjusted to 2024 dollars (BLS CPI-U inflator of 1.44×), then differenced from the citywide ratio. The Reinvestment Fund flags any price-to-income ratio above 3.0 as unaffordable.

Here's how our recommendations stack up:

Two findings stand out:

1. The redesignation tracts carry the most price-to-income pressure — typical home prices run about 39% higher relative to legacy 2010 family incomes than the citywide ratio, with more than one in three sitting in the "very high" tier (homes costing more than 5× CPI-adjusted 2010 family income, well above the city). This pattern is consistent with what The Reinvestment Fund's DRR is built to catch: rising prices outpacing legacy residents' purchasing power in tracts that have already been designated since 2017. Some of that pressure is plausibly attributable to the OZ designation itself — capital flowed in over seven years, and 2010 residents are now competing with higher-income arrivals.
2. The high-signal newcomers carry less price pressure than the citywide average. Typical home prices in these tracts run 8% below the citywide ratio (mean DRR-analog −0.55), and 40% sit in the "affordable" tier (price-to-income below 3.0). These are the strongest non-gentrifying tracts in the eligible universe — places where new construction is genuinely needed but where today's prices still leave room for working-family ownership.

For comparison, the 6 tracts we recommend dropping also sit below the citywide ratio (mean DRR-analog −0.37) — not because they're affordable in any healthy sense, but because they've experienced disinvestment, the other failure mode The Reinvestment Fund's metric captures. Lagging DRR scores signal residents are being squeezed by neighborhood decline rather than by displacement.

How we read the displacement signal

One way of thinking about the displacement issue might read rising DRR as a reason to slow investment in tracts where capital is already moving. We read it differently. Philadelphia is in a sustained housing shortage; Mayor Parker has set a goal of 30,000 new homes; Governor Shapiro has named regional housing supply as a state priority. The single most reliable lever against the price-to-income pressure the DRR measures is more housing supply.

Withholding OZ designation from tracts where investment is already underway slows the supply response to that pressure, not the pressure itself. The capital chasing OZ tax benefits arrives either way — better that it land in tracts with the absorption capacity to turn it into housing than in adjacent neighborhoods that don't. Recent empirical work on new market-rate housing in U.S. cities, including lower-income neighborhoods, consistently finds nearby rents fall relative to comparable areas without new construction (Asquith, Mast & Reed 2021; Pennington 2021; Mast 2023).

Philadelphia already has the right toolkit for existing residents

None of this means OZ designations are a free policy good. New investment in low-income tracts produces price effects that fall on long-term residents most acutely, especially homeowners on fixed incomes and renters without leases. That's a real political and ethical concern even if new supply is the right macro answer.

Philadelphia already has a robust set of programs in place for protecting existing residents from rising costs. Crucially, every one of them is both pro-affordability and pro-supply — none acts as a tax on new construction:

• Homestead Exemption — already at the state-authorized maximum, one of the most generous owner-occupant property-tax breaks in the country.
• Longtime Owner Occupants Program (LOOP) — caps assessment increases for long-term homeowners in rapidly appreciating neighborhoods.
• Low-Income Senior Real Estate Tax Freeze — protects long-term homeowners on fixed incomes from rising tax bills.
• 10-Year Property Tax Abatement — directly subsidizes new housing supply by reducing the tax burden on new construction and rehab.
• Mixed-Income Housing Density Bonus (voluntary) — has produced 300+ on-site affordable units (delivered or under construction) by trading density for affordability without imposing a fixed mandate.
• Philadelphia Land Bank programs — Turn the Key (affordable for-sale homes) and Mixed-Income Housing (rental and ownership) convert publicly held vacant parcels into housing at mixed-income terms.

The right pairing for OZ designation is to direct OZ-eligible capital toward tracts where these existing tools are most active, and to expand the programs that are working. Outcome reporting — household tenure, eviction rates, owner turnover in designated tracts — should be a standard term of any OZ designation going forward.

Two notes on inclusionary zoning. We don't recommend layering new mandatory inclusionary requirements onto OZ-designated tracts — those mandates function as a tax on new construction and slow the supply response. We do recommend City Council examine the deterrent effect of Philadelphia's existing Mixed-Income Neighborhoods (MIN) overlays, several of which overlap with OZ-eligible tracts. Two layers of well-meaning policy pulling in opposite directions on housing supply is worth a hard look. See BPN's MIN analysis.

Caveats on the DRR analog

Two limits worth naming: - Tract level vs. block group. The Reinvestment Fund's DRR is computed at block-group level. Our tract-level aggregation smooths over within-tract variation that may matter for individual neighborhoods. - Single period vs. change over time. The Reinvestment Fund often presents DRR as a change between two periods (e.g., 2014–15 vs. 2019–20) to show whether pressure is rising or falling. We computed a 2023–2025 snapshot. A two-period comparison would be the next refinement and could be done with the same OPA + ACS inputs.

What happens next

The next-round OZ designation process runs on a tight timeline:

1. Now through May 2026 — Mayor Parker's administration assembles Philadelphia's recommended slate.
2. By late spring 2026 — The City submits its recommendations to Governor Shapiro.
3. July 1 – September 28, 2026 — The Governor's office formally nominates up to 217 Pennsylvania tracts to the U.S. Treasury (a 90-day window with a possible 30-day extension to October 28).
4. By end of 2026 — Treasury certifies the new designations.
5. January 1, 2027 — New OZs take effect. The current (2017) OZ map remains in force through December 31, 2028, creating a two-year overlap.

Three things to keep in mind:

• Pennsylvania's overall cap is dropping from 300 to 217 designations. A proportional cut would reduce Philadelphia's allocation from 82 to roughly 58–60. Philadelphia hosts a disproportionate share of the state's eligible tracts and the densest transit and development momentum, which is the case for preserving its 82-tract share.
• OBBB skews capital toward rural areas. The 30% basis step-up for Qualified Rural Opportunity Funds is three times the non-rural rate, so urban tracts have to compete harder for QOF deployment under the new structure.
• The Governor has full discretion within Pennsylvania's 217-tract budget. Whichever Philadelphia tracts get nominated is ultimately Governor Shapiro's call.

The composite ranking is published in full, so if the allocation is cut, any cut line can be drawn from the bottom transparently.

What we're asking for

• A slate that pairs transit access with development momentum. The 82-tract recommendation is one defensible version, with full data and methodology disclosed.
• A willingness to drop the six weakest 2017 tracts rather than redesignate by default.
• Preservation of Philadelphia's 82-tract share rather than a proportional cut. Philadelphia is where Pennsylvania's transit-served, development-ready, jobs-rich tracts are concentrated.
• OZ paired with expanded TOC coverage. Where stations overlap both, that's where the incentives compound.
• OZ paired with Philadelphia's existing affordability toolkit — Homestead, LOOP, senior freeze, 10-year abatement, the voluntary Mixed-Income Housing Density Bonus, and the Land Bank programs are all pro-supply and pro-affordability. No new mandatory inclusionary requirements on OZ tracts. Outcome reporting on designated tracts should be a standard term going forward.

The composite, the underlying signals, and the full ranking are downloadable below. Use them, challenge the weights, and press for a slate that reflects where Philadelphia is actually building.

Methodology

Why these criteria

The Opportunity Zone program exists to concentrate private investment where it can spark lasting economic activity. In Philadelphia, the sharpest signal for that is proximity to high-quality transit in places where development is already underway.

• DVRPC (the regional MPO) finds that 67.3% of Philadelphia's job growth between 2005 and 2015 occurred within three-quarters of a mile of a rail station (JLL analysis, cited in SEPTA Transit-Oriented Development Policy Research, July 2020).
• Mayor Parker has proposed a Transit-Oriented Communities (TOC) ordinance that would expand Philadelphia's existing TOD overlay to a quarter-mile radius. As written, the TOC overlay would apply only to Market-Frankford Line stations that already have TOD designations. (BPN's full analysis of the proposal lives at philly-toc.netlify.app.)
• Our own platform, BPN Property Intelligence, tracks 1,880 active development projects, 37,861 permits issued in the last 3 years, and 5,162 new non-residential business licenses. This data provides a baseline for evaluating which neighborhoods are attracting more or less investment.

Designating next-round OZs along transit corridors with visible permit activity stacks the incentives where development is already moving, instead of scattering them across unrelated pockets. The strongest version of this strategy pairs TOC and OZ designations at the same stations: wherever a station earns an OZ designation in this analysis, it's also a station that would benefit from expanded TOC coverage. Layering the two pairs federal tax incentives with pro-growth zoning to catalyze more investment than either condition would achieve alone. Several of our highest-signal candidates sit along the Broad Street Line (Allegheny, Erie, Hunting Park, Olney) and the Market-Frankford Line above Kensington Ave (Somerset, Tioga) — corridors the TOC ordinance currently leaves out but that, by our measures, show the same transit and development fundamentals that justified TOC designation for the MFL stations covered today.

Why the permit signal matters: avoiding speculation without supply

A common worry about Opportunity Zones is that designating tracts already attracting investment will accelerate displacement of existing residents. We take this concern seriously, and our methodology is built to address it directly. (The displacement-risk audit of the slate appears above; this section explains why permit momentum is a defense against displacement, not a driver of it.)

The Opportunity Zone incentive is most useful where developers can actually underwrite projects. That requires a market with at least some momentum — which is why we use recent permit and business-license activity as one of our three signals. Designating only inert eligible tracts would be an imprudent use of Philadelphia's likely-shrinking allotment. And passing over the eligible tracts already attracting development on the assumption they're "strong enough" to develop without OZ help risks the worst possible outcome: OZ capital flowing into tracts beyond the gentrifying fringe that don't have the underlying market depth to absorb it — generating speculative pressure on existing residents without producing the housing supply or commercial activity that would justify the incentive in the first place.

The right answer is to designate the tracts where investment will actually compound — places with transit, with jobs access, and with measurable signs that the market can absorb new construction. That is what our composite is built to identify, and it does so without concentrating designations in the strongest, most gentrifying markets.

The composite

Each tract in our scoring universe — the 218 IRS-eligible tracts plus 2 § 5.04 near-miss candidates we score alongside them for context — is scored based on three signals. Each signal is ranked against the other 219 tracts in the scoring universe and expressed as a percentile. The three percentiles are averaged into a 0–100 composite score.

Signal 1 — Transit access (one-third weight)

Average of two things:

• Quarter-mile walkshed share — how much of the tract's land area sits within a quarter-mile walk of any SEPTA fixed-rail station (Regional Rail, Market-Frankford, Broad Street Line, Norristown High Speed Line, Subway-Surface trolleys T1–T5, Route 15 Girard, Routes 101/102). This mirrors the tod_rail flag we use on our platform.
• Proximity — how close the tract's center is to the nearest station, so we can still tell apart tracts just outside the quarter-mile walkshed from tracts deep in non-transit territory.

Tracts within 0.5 mile of any Trolley Modernization corridor station (Routes T1–T5 and Route 15) receive a small additive bonus (+0.08 to the transit-access percentile, capped at 1.0). SEPTA's Trolley Mod program is replacing legacy surface flag-stops along these alignments with new accessible high-platform stations; the bonus reflects forward-looking service-quality investment that current GTFS doesn't capture.

Signal 2 — Regional jobs access (one-third weight)

The number of jobs reachable via a 30-minute transit ride from the tract's nearest DVRPC-evaluated station. Sourced from DVRPC's Building on Our Strengths station-level dataset, which in turn pulls the jobs-access figure from the Center for Neighborhood Technology's Housing + Transportation Affordability Index.

Signal 3 — Permit and business momentum (one-third weight)

Average of three things, each measured over the last 3 years:

• Housing permits — L&I "Residential Building" permits
• Commercial permits — L&I "Building" permits
• Business licenses — newly-issued non-residential licenses (restaurants, retail, services), excluding rental and vacant-property licenses

Sources: the permits and business_licenses tables on phl.carto.com, joined to 2020 census tract boundaries via OPA parcel coordinates.

Composite formula

composite = (transit_score + jobs_score + permits_score) / 3 × 100

Each tract's composite is a 0–100 score. All component ranks and raw inputs are preserved in the accompanying CSV, so anyone can pull down the data and re-weight the three signals however they want.

Soft-site context (shown, not scored)

Alongside each tract's composite, we report a soft-site count — the number of vacant, surface-parking, auto-oriented, or no-building-footprint parcels in the tract (from the city's OPA dataset). This is a separate signal of where new construction can physically go. A high-scoring tract with few soft sites is already built out; a high-scoring tract with many soft sites has room to absorb new investment.

Limitations & caveats

• Eligible-tract universe. This analysis uses the IRS Rev. Proc. 2026-14 official LIC list (218 Philadelphia tracts) as the eligible universe. A separate near-miss screen (outputs/SECTION_504_SCREEN.md) identifies tracts not on that list that could plausibly be nominated under § 5.04 — including two of our strategic-swap candidates.
• Tract boundary mismatch (minor). The 2017 TCJA-designated OZ set (82 tracts) was drawn on 2010 geography, and 4 of those 82 tracts don't have clean equivalents in the 2020 shapefile because boundaries were redrawn. We treat 78 of the 82 as "matched"; the other 4 are flagged in the source JSON but excluded from the redesignation ranking.
• The DVRPC jobs-access score is per-station, not per-tract. We assign each tract the score of its nearest station. Tracts far from any rail station inherit a low score — which is the right call for a transit-oriented ranking, but it does mean the composite penalizes non-transit-served tracts that might still be defensible OZ candidates on other grounds.
• DVRPC's quartiles are regional, not Philly-only. DVRPC's 1–4 quartile scores are calibrated against all 145 stations in the 9-county region. Many Philadelphia stations end up in the bottom regional quartile for jobs access simply because they're one-seat rides within the city, while NJ Transit stations with Northeast Corridor service to both New York and Philadelphia sit in the top quartile. We use the raw job count — not the quartile — to avoid this distortion.
• Business licenses are a proxy for new commercial formation. We exclude residential rentals (which dominate by volume), but the set still includes food vendors, sidewalk events, and other small-scale activity. Readers may want to weigh those lighter than restaurant or retail licenses.
• Permit window is the last 3 years (April 2023 → April 2026). Tracts that saw heavy investment before 2023 don't get credit here. Recency-weighted scores in the CSV provide a finer-grained time signal if a different window is preferred.
• Soft sites are shown, not scored. A later version could add soft-site density as a fourth signal — tracts with strong transit, strong permit activity, and lots of redevelopable parcels are the cleanest investment targets. We kept this version to three signals so the weights stay easy to read and adjust.
• No demand-side data. We measure supply signals (permits, licenses), not outcomes like rent growth or occupancy. Incorporating BPN Property Intelligence's real estate submarket dashboards into the analysis would yield stronger rankings, but that integration was out of scope for the initial release.

Data sources & reproducibility

The full methodology is scripted in Python, and the interactive map on this site lets you adjust the three weights and see the rankings shift in real time.

Acknowledgements

Thanks to Joe Dizenhuz at University City District for the OZ eligibility shapefile this analysis builds on, and to Brandon Cohen at CivilGrid, lead software developer of BPN Property Intelligence.

About Build Philly Now

Build Philly Now (BPN) is an economic development think tank in Philadelphia dedicated to building more of the things a growing city needs to thrive: housing, infrastructure, and energy. This research is produced with BPN Property Intelligence — our software platform covering parcel-level data, permits, zoning, transit, and development activity across Philadelphia. Explore the data at map.buildphillynow.org.

Contact Jon Geeting, Policy and Advocacy Director, Build Philly Now jon@buildphillynow.org