By Sarah Salarano and Simon Butler, Mona Shah & Associates Global
In the wake of the House Democrats’ election of Rep. Hakeem Jeffries (D-N.Y.) to minority leader, EB-5 practitioners are feeling optimistic about their prospects, given the Congressman’s longtime support of the program.
According to Aaron Grau, executive director of trade association Invest In the USA, Jeffries “understands and more importantly appreciates the sacrifices immigrants to the United States make.
“That alone sets him apart, but in addition to that, he understands the specific benefits [EB-5] capital brings,” Grau added. “He understands its role in economic development and job creation in his District and across the country. I am grateful he has the support of his Congressional colleagues to be the new Democrat Leader and look forward to working with him and his team.”
Jeffries’ record on this front is admirable. In September 2019, the Congressman met with various EB-5 experts at a roundtable held by Mona Shah & Associates Global to talk about the EB-5 Immigrant Investor Program. There, Jeffries – a staunch immigration advocate who takes the minority-leader reins from House Speaker Nancy Pelosi (D-Calif.) in 2023 – pointed to the his constituents’ diversity and “the colloquial ‘American dream’ that many of them share.”1 As many of these individuals are immigrants or children of immigrants, “[this] dream, Jeffries stated, ‘must be preserved’ and included in the larger narrative of immigration policy.”
Jeffries also echoed common concerns of fractioning within the EB-5 community, and “emphasized that it is vital that EB-5 stakeholders come together and support sustainable changes”2 to ensure the effectiveness of the program. Jeffries, a lifelong Democrat, shared his own experience when he reached across the aisle to engage in conversation about the EB-5 program with Jared Kushner, then Senior Advisor to President Trump. While reflecting on this meeting at the 2019 roundtable, Jeffries noted the importance of “engaging the bicameral legislature.”3 We witnessed the significance of bipartisanship when the EB-5 Reform and Integrity Act of 2022 (“RIA”) finally came to fruition earlier this year. After months of deliberation, divisive and highly partisan issues such as the DACA Program and federal budget allotments repeatedly postponed the passage of the bill until March 2022, one year after it was initially proposed in March 2021 by Senators Grassley (R-Iowa) and Leahy (D-Va.).
Congressional support is critical to the success of the EB-5 program. The passage of RIA not only reauthorized the Regional Center program, stimulating the economy with countless jobs and millions of dollars in EB-5 capital, but also instituted much-needed integrity measures to protect both investors and projects alike. Other welcome changes brought by this legislation include the annual reserved visa categories, which allow investors from backlogged countries to jump to the front of the line, and the ability for certain investors to file concurrently for Adjustment of Status, thereby eliminating the ever-growing waiting period for their work authorizations, travel permits, and conditional green cards. Thanks to this legislation, which has been developing within both the EB-5 community and Congress for years, project developers and immigrants alike can take advantage of exciting opportunities to invest.
There are, however, some annoying hurdles to surmount. Jeffries is well aware of the misconceptions about EB-5s circulating in both Congress and among the general public. Some Democrats have complained that EB-5s only benefit the rich and aren’t reaching targeted employment areas in rural communities. Thankfully, Jeffries, who also has lambasted former President Donald Trump for his (ridiculous) 2020 immigration ban, has the chops to mitigate such misinformation, as well as champion its continued funding.
In this light, EB-05 practitioners have a powerful- and vocal – ally. The question is, just how much will things change under his auspices as House minority leader … and whether things could get better. Opening up the program to more immigrant investors would be optimal, as such an influx could provide a boost to an economy riddled with inflation and rural unemployment. Plus, the EB-5 submissions process could stand some additional streamlining, particularly with respect to digitalization (though recent guidance from United States Citizenship and Immigration Services could help alleviate that burden). Will Jeffries provide the impetus for further inroads into this area?
Clearly, we will have to wait and see. But no matter what happens, EB-5 practitioners should be glad that the industry has a safety net going forward – at least for the time being. Hopefully this net will hold into 2023 and beyond.