Washington can be a tough place to read. Even so, there’s a policy debate at hand that I find puzzling.
We have a new president who has boldly promised to create 25 million jobs over the next decade and a conservative Congress deeply concerned with reducing the tax burden on the American people and addressing the national debt.
And yet there is a federal program on the books right now that answers all calls but faces possible expiration on the eve of the Trump administration’s 100-day mark.
The Trump administration’s shifting policies on immigration and a variety of other concerns have prompted some to wonder what will become of EB-5.
The EB-5 program was created in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. The program allows foreign investors and their wives and unmarried children under 21 to obtain a green card and eventually become U.S. citizens in exchange for a $500,000 or $1 million investment in a commercial enterprise creating at least 10 jobs.
Just before President Obama left office, the Department of Homeland Security proposed some serious rule changes to the EB-5 visa program, which awards green cards to foreign nationals investing in job-creating U.S. projects. The government currently gives out 10,000 of these visas a year, the overwhelming majority of them to Chinese investors investing in real estate development projects.
In the wake of a number of scandals related to fraudulent investment activity, dirty money, and skepticism about how many jobs the program really creates, the Obama administration proposed raising the minimum investment threshold to more than double what it is now, shallowing the pool of eligible investors.
Dallas Mayor Mike Rawlings is urging Congress to reauthorize and expand the controversial EB-5 program that gives wealthy foreigners immigration visas in exchange for $500,000 business investments in the United States.
The Employment-Based Fifth Preference is set to expire Sept. 16 and Rawlings is one of the big city mayors co-sponsoring a U.S. Conference of Mayors resolution requesting renewal of the program.
Angel Brunner remembers her fight to fund two new Marriott hotels at the San Jose International Airport during the last downturn. Though fully entitled and flagged, the project failed to get financing because of the market’s paralysis at that time. Nevertheless, by working long and hard with the City of San Jose, the hotel industry association and the Department of Commerce, Angel was able to make a case that hotel projects create jobs, and successfully secured EB-5 financing to help develop the first new hotel in 20 years for that submarket of San Jose. Angel credits her ability to complete projects to her training in finance, economics and urban planning, as well as deep experience in effectively building an innovative capital stack. Even so, assuring her development partners that the regulatory framework surrounding foreign capital investment will remain predictable is an ongoing challenge. As an international adventurer, Angel takes an occasional hike of the Great Wall during her regular trips to China, or opts for visits to exciting places like the world’s tallest treehouses in Laos.