On Sept. 30, the U.S. Senate is set to extend the EB-5 visa program, which offers residency to wealthy foreigners (and their families) if they invest in job-creating development projects, with a minimum of $1 million — or $500,000 in rural areas or communities where unemployment is higher than the national average.
Since EB-5 was started, it’s funneled nearly $5 billion into construction projects like apartment condos, manufacturing facilities and university buildings, mostly with money from Chinese investors. The bulk of its funds have gone to cities like New York and Los Angeles, backing projects like the $20 billion Hudson Yards in Manhattan. According to the Brookings Institution it has created, both directly and indirectly, upward of 85,000 jobs.
But critics say a number of high-profile fraud cases with EB-5 investors and the fact that developers have more control on the ground than the U.S. government does have pushed it out of the sphere of its original purpose. It was established in 1990 largely as a means to revitalize economic development, and the lower minimum investment of $500,000 is specifically intended to help high-unemployment areas.
Vermont Senator Patrick Leahy, a longtime supporter of the program until his state was embroiled in one of the largest EB-5 frauds in history, and Iowa Senator Chuck Grassley spent 2015 pushing for its reform. In Vermont, two developers were accused by the U.S. Securities and Exchange Commission of spending $350 million from 700 EB-5 investors on old projects that had gone over budget; the funders thought they were contributing to a new biomedical facility and ski lodge renovation.
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