WASHINGTON – After years of wrangling, the Trump administration has agreed to revamp a controversial visa program for wealthy foreign investors that benefited developers such as President Donald Trump and his son-in-law, Jared Kushner.
A new final rule, to be published Wednesday, will nearly double the minimum amount of cash required to secure an EB-5 investor visa from $500,000 to $900,000 for projects in needy areas.
It will also revise the standards for what is considered a blighted or high-unemployment neighborhood, to prevent developers from “gerrymandering” their own boundaries to attract investments for projects located in affluent communities.
The standard investment threshold for projects in non-needy areas will increase from $1 million to $1.8 million. The amount will automatically adjust for inflation every five years.
The rule, effective November 21, marks the first significant revision to the program since 1993, according to U.S. Citizenship and Immigration Services.
“This rule not only brings more integrity to our immigration system, it also brings new jobs to America,” Sen. Chuck Grassley, R-Iowa, said in a statement Tuesday.
Grassley, along with his Democratic colleagues, has been advocating for reform for years, proposing at one point to eliminate the program entirely because of widespread abuses. Each time, their efforts were defeated by what he called “big-money interests.”
Congress created the EB-5 citizenship pathway in 1990 as a way to provide jobs during a recession. The visa program required an investment of at least $1 million in a new business that would create at least 10 full-time jobs – or $500,000 in projects located in high unemployment areas. In exchange, the investor and immediate family members receive two-year conditional green cards.
Critics derided the program as “green cards for cash” and “golden visas.” Sen. Dianne Feinstein, D-Calif., called it “U.S. citizenship for sale.”
The visa program enabled foreign investors to park their cash in high-end real estate in Beverly Hills and Manhattan. That’s how Trump Bay Street, a 50-story luxury apartment complex built by Kushner Companies in Jersey City, was financed, according to a 2016 Bloomberg News report. A quarter of the project’s funding – $50 million – came from EB-5 investors.
The program came under more scrutiny in 2017, a time when Kushner was already a White House adviser to Trump, when his family real estate firm made a sales pitch to Chinese investors. One speaker advised those in attendance to invest early – under the “old rules” requiring $500,000 – in case regulations change under Trump.
One week before Trump was sworn into office, the Department of Homeland Security under President Barack Obama had proposed new rules for the visa program, enabling DHS, not states, to decide which areas qualify as economically distressed.
Trump, upon assuming the presidency, imposed a freeze on all pending regulations.
The new rule to be published Wednesday, like the Obama-era proposal, eliminates a state’s ability to designate certain geographic and political subdivisions as “high-unemployment.” Instead, Homeland Security would make such designations.