Thursday marked the renewal of the EB-5 program, the popular program for developers and investors (Chinese, specifically) who want to get into the US real estate game. Despite concerns of fraud—as well as massive developments built on the backs of EB-5 funding in unique "visa-for-cash" deals—the renewal is gaining support among experts.
"To me, EB-5 is really a win-win-win," Beacon Economics Director of Economic Research Jordan Levine (left) tells Bisnow. Investors get access to affordable capital, the investor gets to come to the US, and their kids get to go to UCLA, Stanford, Harvard, "and the US economy wins."
Homeier & Law PC partner Michael Homeier (center) and shareholder Clem Turner (right) both agree, saying the program only benefits the American economy real estate market.
The EB-5 Program has contributed billions of dollars to the US economy "at zero taxpayer expense," Michael tells Bisnow, adding the EB-5 was a vital piece of the puzzle that saved and created jobs for Americans. "Especially during the recession when US banks weren't lending."
The pair says the EB-5 continues to be a vital piece of the financing package during a strong economy. Related Cos recently raised $600M for a big project, a "critical" part of the project.
Over the past few years, Clem points out, the EB-5 has poured billions into the US GDP and is credited with creating over 41,000 jobs. And while the risk of fraud does exist—especially with this kind of money involved—the upside far outweighs the threats, Michael says.
In fact, the SEC is actively regulating the EB-5, which will ultimately enhance it, Clem says. And for the next three months, Congress will have time to tweak it. All in all, "the EB-5 program will continue to be a positive influence on the economy," Jordan says.
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