EB-5, the federal visa program that helped fund development projects like the massive Hudson Yards in New York, has been fading recently and on the ropes, a result of fraud and its own popularity. But it still has supporters, and they are now looking to Lindsey Graham, Chuck Schumer and other powerful elected officials to help ease newly-passed rules, according to the Wall Street Journal.
The rules took effect in November, and were meant to crackdown on abuse and pull the 30-year-old program into the 21st century.
Sen. Graham of South Carolina and Sen. Schumer of New York are its co-sponsors; its sponsor is Sen. Mike Rounds of South Dakota. The bill would lower the minimum amount that foreign investors have to pour into some projects in order to receive a green card. It would also allow some investors to stay in the U.S. as they wait for their visas, according to the Journal.
EB-5 allows foreign investors the ability to obtain a green card in exchange for investing and creating jobs in the U.S. Developers latched onto the program as a way to obtain cheap financing for ground-up construction, but investor demand has waned due to visa backlogs and fraud and misuse in the program.
Under the new EB-5 regulations, investment requirements rose to $900,000 from $500,000 for a project in a low employment zone, which are known as targeted employment areas. The investment amounts also climbed to $1.8 million from $1 million in all other areas.
The new rules also prohibit developers from what had become a common practice of tacking on a sliver of a targeted employment area to a project that is in a wealthier area in order to qualify for the lower amount.
But opponents of the new rules say that it will discourage investment and ultimately cut down on development. A Florida regional center recently went to federal court to seek in order to halt enforcement, alleging the new rules violate the U.S. Constitution, were not property reviewed for potential fallout and would end up killing his business.
Nicholas Mastroianni II, chief executive of U.S. Immigration Fund — an EB-5 regional center — gave Graham a $5,000 campaign contribution in September and Aaron Grau of the EB-5 trade group Invest in the USA, donated $2,000 to the senator, according to the Journal, citing the Center for Responsive Politics. [WSJ] — Keith Larsen