The real estate industry is divided over a federal program that has allowed urban tower developers to get low-cost financing from foreign investors seeking green cards.
The EB-5 program makes green cards available to immigrants who invest at least $500,000 in certain businesses that create jobs.
The program is designed to funnel financing to job-creating projects in rural locations or areas with high unemployment.
Developers in designated high-unemployment areas can raise $500,000 per investor under the program, and the minimum is $1 million per investor outside such areas.
Critics complain urban developers have abused the EB-5 program by obtaining designations of Manhattan and other cities as high unemployment areas.
New York-based Related Companies, by far the largest user of EB-5 financing, opposes a proposed compromise that would funnel the financing to some, but not all, projects in prosperous cities.
An EB-5 trade group called Invest In the USA (IIIUSA) has pushed for the compromise.
“We’ve got to do something, because if we don’t do something, something’s going to get shoved down our throat or the program’s over,” Pat Hogan, chief executive of a large regional center that raises EB-5 financing for U.S. businesses, told the Wall Street Journal. Hogan, who serves on the board of IIUSA, said “I’m for what’s right within EB-5.”
Related’s supporters include the U.S. Chamber of Commerce and the Real Estate Roundtable. The development company argues that many of its construction workers live in impoverished neighborhoods far from the projects they work on, so limiting the benefits of the Eb-5 program to certain areas is illogical. [Wall Street Journal] — Mike Seemuth