It is probably a coincidence, but the dying Obama administration announced two excellent immigration decisions yesterday (January 12).
- The president announced that the long-standing policy on illegal immigrants from Cuba — automatic legalization if they can reach dry land in America — would be terminated immediately; and
- The Department of Homeland Security announced proposed regulations of the EB-5 (immigrant investor) program that will nearly triple the amount of money to be raised, without increasing the number of visas, and will probably tilt the distribution of these funds away from already prosperous areas into more depressed ones.
As near as I can tell, the Cuban decision came as a surprise, but the EB-5 modifications have been in the works for weeks if not months.
Two major and some lesser EB-5 changes were proposed in the Federal Register:
Minimum Investment in EB-5. Currently, an alien with a half-million dollars to spare can make an EB-5 investment in a DHS-approved, but not guaranteed, deal and eventually get a full set of green cards for the investor, the investor's spouse, and all their children under the age of 21.
This produces about $2 billion a year in new foreign investment (a drop in the bucket of additional foreign investment each year in the United States) and creates visas for about 10,000 aliens, about 90 percent of them from China. I happen to think that selling visas is a bad, crass policy, but if we are going to do it, we might as well get as much money as we can. The proposed new minimum investment — which will still create a family-sized set of green cards over time — is $1,350,000. That is 2.7 times the current minimum (I suggested a tripling of the basic amount in an earlier posting).
Given the fact that at the half-million level, the EB-5 program is over-subscribed, and given the fact that there are large numbers of very rich Chinese who are (understandably) worried about their future in China, I suspect that there will be no shortage of EB-5 investors at the new dollar figure.
It will be up to the incoming Trump administration to decide whether the new regulations are a good idea or not, but the Obama administration has made a major contribution by announcing the large-scale increase in the basic investment, a figure that has not changed over the last 25 years.
Location of Investments. Under the current EB-5 program, just about any location in America can be regarded as an area of high unemployment, because of the way such targeted employment areas (TEAs) can be designed. The statutory goal was to place the investments in areas of high unemployment, but this could allow (as it did) a building on Wall Street to be placed in a cleverly designed TEA that snaked across the East River to a distant Brooklyn housing project — and one could not get from one to the other, without going outside the TEA, except by boat.
The new proposal calls for compact TEAs, and this should push some of the investments away from the Wall Streets and Park Avenues of America.
The other suggested changes in the program relate to which of the rich aliens get their green cards, in what order, and have no impact on the number of visas issued, the amount of money to be raised, or on the location of the investments.