Gov. Josh Green announced that Hawaiʻi has designated 25 census tracts statewide under the federal Opportunity Zones 2.0 program, including two on Maui: Lahaina’s Front Street and Kula Makai in Kīhei. The designations cover 19 tracts on Oʻahu, four on Hawaiʻi Island and the two Maui tracts, putting Lahaina’s ongoing recovery squarely inside a federal program built to attract long-term private investment into designated low-income communities.
According to Hawaii News Now, Opportunity Zones 2.0 offers federal tax incentives to investors who commit long-term capital to designated communities, with extra benefits available for eligible rural areas. Maui Now named Lahaina Front Street and Kula Makai in Kīhei as the two Maui tracts; KHON2 gives their census tract numbers as 314.04 and 303.06, respectively. The state said it selected tracts based on three priorities: housing, clean energy and building a more resilient economy, per the same Hawaii News Now report.
Months of Talks Led to the Final List
The designations followed months of engagement with county leadership, federal partners, national experts, community stakeholders and the private sector, the station reported. James Kunane Tokioka, director of the Department of Business, Economic Development and Tourism, said the designations would funnel capital into housing, healthcare, film and agriculture projects, according to KHON2. KHON2 also reported that the incentives could help bring hundreds of millions of dollars in private investment to neighborhoods across Hawaiʻi.
Not every county made the cut. No census tracts on Kauaʻi were eligible for designation, and census-level data needed to seek an appeal simply was not available there, the Hawaii News Now report said. That left Kauaʻi without representation in a program meant to channel capital into Hawaiʻi’s economically distressed neighborhoods.
An Appeal — but to What Extent?
Coverage differs on just how much of the final list depended on an appeal. KHON2 reported that Hawaiʻi secured all 25 designations through an appeal to the U.S. Department of the Treasury after the areas were initially found ineligible. Hawaii News Now, by contrast, reported that a designation was initially found ineligible but that the state secured it through an appeal to the Treasury Department. The accounts differ on the appeal’s scope.
What the Tax Incentive Is Meant to Do
Opportunity Zones trace back to the Tax Cuts and Jobs Act of 2017, when Congress established the program to encourage long-term investment in low-income urban and rural communities nationwide, according to a page from the Hawaiʻi Department of Business, Economic Development & Tourism. A state document posted by DBEDT describes the earlier round of the program, saying 25 census tracts were selected from 99 that met eligibility requirements and were approved by the U.S. Treasury Department.
Nationally, the track record is mixed. A Brookings analysis of 7,174 of the 7,826 designated Opportunity Zone tracts across the country from 2018 through 2025 found that builds per year rose 9% compared with the two years before the program launched, and the share of all new U.S. building construction happening in Opportunity Zones climbed from 5.8% to 6.6%. A separate, snippet-level finding from the U.S. Government Accountability Office suggests the incentive has mostly funded real estate development in urban areas with existing community support and infrastructure, with some states reporting job and housing growth while most remained unsure about outcomes. Brookings describes the current round, Opportunity Zones 2.0, as a permanent version of the program with this new round of designations arriving in 2026.
The Case for Maui and Beyond
For Hawaiʻi officials, the pitch centers on using federal incentives to pull private money into sectors the state wants to grow: healthcare, tourism, advanced manufacturing, agriculture, broadband and film. The designations can also bring private capital into energy projects aimed at lowering costs, creating local jobs and advancing clean-energy goals, per the seed reporting from Maui Now. Whether and how quickly that capital actually reaches Lahaina’s Front Street or Kīhei’s Kula Makai, and what specific projects might benefit, remains to be seen.
