An increasingly popular yet highly controversial immigration program that rewards foreign investors in American real estate with green cards comes to an end this week, with billions of dollars at stake when it comes to potential commercial development. The EB-5 program, also known as the ‘Immigrant Investor’ program, was originally created to try to encourage job growth; however, it has come under attack from critics after a number of cases of misused funds and outright fraud.
The EB-5 program was first passed by Congress 25 years ago, back in 1990, to allow foreign investors to obtain US visas if they invested $1m in a company or project that resulted in the creation of a minimum of ten new jobs. The program was later modified to allow $500,000 to be invested in rural areas or areas with high unemployment.
The latter clause is one of the factors that has caused controversy, with EB-5 money sometimes being used to create swanky new projects in areas that are already well-off, such as Hunters Point Shipyard in San Francisco and Hudson Yards in New York City.
“Some of the new projects, for example, in New York are in areas that look like they’re super rich, wealthy areas that couldn’t possibly have high unemployment, and it’s the case that those areas are defined within a bigger area of high unemployment and so they qualify,” says Brookings senior fellow Audrey Singer. “Other places that are in rural areas or in localities that don’t have the resources and the cache that a New York project would are not going to be able to see as many investors coming to those areas.”