By John Banks, president, REBNY
The popular EB-5 visa program which offers foreign investors a U.S. green card in exchange for an investment in the U.S. economy, was set to expire last week.
Although the expiration date was pushed back to December 11, Congress still must act on a long-term re-authorization of this critical program.
EB-5 helps create tens of thousands of jobs each year by channeling foreign investment into local economies.
By making an investment in an American business of $500,000 to $1 million that creates at least 10 full-time jobs for American workers, foreign investors are eligible for one of the 10,000 visas set aside annually for participants in the EB-5 program.
Since its creation in 1992, this program has helped the U.S. through difficult economic periods, contributed to New York City’s real estate boom, and ensured employment for tens of thousands of Americans.
EB-5’s regional centers run at no cost to taxpayers, and failure to reauthorize the program before its official expiration date would have considerable negative effects on our economy and job market.
According to a June 2015 study commissioned by the EB-5 Investment Coalition, the $1.6 billion in investments in 2013 alone through the EB-5 program will create at least 31,000 jobs.
This level of job creation is something which cannot be disregarded, and since the program has become increasingly popular in recent years, allowing this program to expire would prevent the creation of jobs for tens of thousands more workers in years to come.
Additionally, the expiration of the EB-5 program would result in a loss of at least $6.8 billion in foreign investment dollars for our economy — a figure based solely on the huge number of pending EB-5 petitions that are already in the pipeline but have not yet been approved, and that does not take into account projects that have not yet begun the filing process.
Capital generated through the EB-5 program has fueled dozens of projects all across the United States, including some key projects in New York City, such as Hudson Yards, the transformation of three World War II-era machine shops into green industrial complexes at the Brooklyn Navy Yard, the redevelopment of the Battery Maritime Building with its ferry link to Governor’s Island, an upgrade of the George Washington Bridge bus station into a modern facility with 50 percent more bus capacity and better retail space, and many others.
Although there is broad, bipartisan congressional support for continuing the program, a key concern at this time is how the program is modified going forward.
These considerations include finding an equitable balance to encourage EB-5 investments across rural, urban, and suburban areas, how many years to extend the program, as well as how to implement these changes for both existing and future EB-5 participants.
Other proposed changes include increasing the investment from $500,000 and $1 million to $800,000 and $1.2 million.
REBNY has been working closely with The Real Estate Roundtable and the EB-5 Investment Coalition to ensure a long-term reauthorization for the program in December.
We think a long term extension of the program should include vital reforms that would deter evolving risks of investor fraud and safeguard against any potential threat to homeland security.
REBNY strongly opposes changes that would disadvantage urban areas, and we are working to ensure that whatever program modifications do take place are phased in reasonably.
We are confident that a middle ground can be struck between all parties, and we urge Congress to take whatever steps necessary to ensure that this important program is not allowed to expire.
In other REBNY News:
October 8 is REBNY’s next Secrets of Top Brokers and Industry Leaders seminar. Join us in the Mendik Education Center from 5:30 p.m. to 7 p.m. to hear our panel of real estate experts examine and present current trends in real estate to enhance the professional knowledge of each attending agent. Registration is required, and more information can be found on www.rebny.com, or by contacting Yesenia Dhanraj at YDhanraj@rebny.com.
October 13 is the Residential Division’s next Breakfast Club Seminar in the Mendik Education Center. These seminars are an informative, interactive, and free way for participants to spend 90 minutes with dynamic residential colleagues who are known for a particular expertise. Registration is required. To find out more, visit www.rebny.com or contact Yesenia Dhanraj at YDhanraj@rebny.com.
REBNY’s New Member seminar, “Keys to Commercial Real Estate,” will take place on October 19 from 5:30 p.m. to 7 p.m. in the Mendik Education Center. Moderated by James Nelson, Vice Chair at Cushman & Wakefield, the panel includes Randy Modell, William Montana, and Joanne Podell, who will welcome our new members in a free seminar for REBNY members only. To register, please login to www.rebny.com.
The 27th Annual Residential Deal of the Year Awards and Charity Gala will be held at Pier Sixty at the Chelsea Piers on Wednesday, October 28 from 6:30 p.m. to 11 p.m.! The Residential Brokerage Division encourages you to attend one of the biggest and most highly anticipated industry events of the year, and to also congratulate the night’s award winners.
To make a reservation, visit www.rebny.com, or contact Jeanne Oliver-Taylor at JTaylor@rebny.com.