The fight over the future of the federal EB-5 immigrant investor program appears to be coming down to the wire.
Wednesday night, a swath of influential federal lawmakers told EB-5 industry officials they had settled on an accord in an attempt to push through renewal legislation in coming days. It comes over the objection of a set of urban real-estate developers who are at the center of a fight over the program’s future, making it unclear whether Congressional leaders will act on the draft.
The program, a key piece of which is due to expire Dec. 11, gives up to 10,000 green cards annually to aspiring immigrants who invest in certain job-creating U.S. businesses.
In recent years, it has become dominated by large urban real-estate developers, most of whom are building projects in prosperous neighborhoods but benefiting from a provision meant to aid rural and high-unemployment areas. Some lawmakers have sought to block such developers from qualifying for that provision—called “targeted employment areas”—but have met stiff resistance from the developers.
The draft legislation sent around Wednesday night—and reviewed by The Wall Street Journal—would block developers in many prosperous parts of New York and other cities from qualifying as targeted employment areas, although it would be less restrictive than past proposals that met stronger opposition.
The draft is supported by Senators Charles Grassley (R., Iowa) and Patrick Leahy (D., Vermont), and Reps. Bob Goodlatte (R., Virginia) and John Conyers (D., Michigan), among others, bringing on board the leading Democrats and Republicans on the Judiciary committees in both chambers of Congress. In addition, the large EB-5 industry group Invest in the USA supports it.
Taking aim at the proposal is a set of powerful developers and prominent allies including the Chamber of Commerce and the Real Estate Roundtable.
A spokeswoman for the EB-5 Investment Coalition—a group that has pushed policies supported by the urban developers – said the group is “strongly opposed to this approach.” Congress, she said should approve reforms meant to block fraud in EB-5 “while taking the necessary time to resolve the numerous complex issues that remain, including TEA designations.”
The developers—led by New York-based Related Cos.–have previously said they should continue to be able to qualify because they are creating jobs from people who commute from high unemployment areas. Critics have noted such an approach suggests nearly all of the country would qualify as a targeted employment area.
In a letter to Senate leaders sent Friday, Messrs. Grassley and Leahy said they oppose “any extension that does not include broad reforms that we have negotiated.”
Here are some some of the main changes for targeted employment areas in the new draft legislation, titled the “The American Job Creation and Investment Promotion Reform Act”:
-Aspiring immigrants investing in projects within targeted employment areas would have to invest a minimum of $800,000 (up from $500,000 today), while the minimum for areas outside those districts would remain at $1 million
-The legislation would create two main categories for the targeted employment areas, each with 2,000 visas a year set aside for them (of 10,000 total for EB-5). Rural areas as well as some exurban counties would be one group.
-The other would be high-unemployment zones of urban areas, though those zones would be restricted to no more than 12 contiguous census tracts, largely clustered around the projects, or projects in census tracts with high poverty rates.
Mr. Conyers said in a statement the bill, with these changes, “Represents a real opportunity for distressed urban areas to compete for valuable new development.”