More Data Shows Continuing Tilt of EB-5 Funds Toward Manhattan

By David North, November 29, 2016

An additional flood of data on where EB-5 funds are spent shows a continuing tilt in the direction of New York City, generally, and toward Manhattan in particular.

I wrote on this trend a few days ago; now we have about twice as much data — all collected by the same academic source — that shows these trends running in the same direction.

The EB-5 program gives a set of green cards to an alien family placing $500,000 in a Department of Homeland Security selected, but not guaranteed, investment. Each investment is supposed to create 10 jobs. In recent years there has been growing congressional criticism that these funds, originally intended to flow to depressed areas, have instead supported real estate development in prosperous parts of big cities.

Given the refusal of the Obama administration to release data on the geographic spread of the program's developments, two New York University scholars, Jeanne Calderon and Gary Friedland, pried a lot of information on the subject from other sources. Their first findings, which I reported earlier, covered 27 of the biggest EB-5 investments in the country; their second, which I just learned of, deal with 25 more of them. The two studies combined, though not national samples, show where five to six years' worth of EB-5 visa money has gone.

The program is capped at 10,000 visas a year, which translates (because of visas for family members) to about 3,500 to 4,000 investments a year. The NYU data covered 20,478 investments.

So where did the money go when both data sets are examined?

We see that 39.7 percent of the EB-5 funds went to Manhattan, the richest of the city's five boroughs, and 56.7 percent of the national total went to New York City as a whole, including Manhattan. That left 43.3 percent for the rest of the country, including some spent elsewhere in New York State.

Since Manhattan has just 0.5 percent of the nation's population, this means that the per capita receipt of EB-5 funds there runs more than 79 times as large as it does in the rest of the nation.

Will the majority of the members of Congress (largely Republican) continue to support a program that tilts so obviously against the interests of everyone except the constituents of the dozen congressmen from New York City (11 of whom are Democrats)?

The section of the EB-5 program dealing with the half-million investments is due to sunset on December 9, unless Congress acts.