Congressional reauthorization of EB-5 “regional centers” needs to pass before the investment program expires on September 30, and should include measures to improve the program’s transparency and accountability as outlined in an August 12 report by the U.S. Government Accountability Office (GAO), according to Jeffrey DeBoer, President and CEO of The Real Estate Roundtable.
The EB-5 program brings foreign capital into the U.S. to help public-private partnerships finance development projects in rural, suburban, and urban communities across the nation. EB-5 financing has assisted funding of infrastructure, charter schools, real estate development, energy production, health care facilities, ski resorts, hotels, and manufacturing plants, among others.
According to DeBoer, the EB-5 program “provides unique gap financing for large and small projects across the nation and creates American jobs at no cost to taxpayers.”
The GAO report “focuses on measures to safeguard national security, deter evolving risks of investor fraud, and clarify accepted government methodologies to show job creation. Its findings are commendable and pending bipartisan bills presently address these identified concerns. This report can now be the catalyst that points the way toward reform and multi-year reauthorization by Congress.”
The consequences of not reauthorizing EB-5 regional centers include:
- The U.S. will lose an estimated $6.8 billion in foreign investment dollars if the EB-5 regional center program is not reauthorized by September 30. (Based on the 13,663 pending EB-5 petitions as reported by U.S. Citizenship and Immigration Services at the end of FY’2015 Q2; assumes the minimum $500,000.00 investment for each pending petition.)
- Other countries have their own programs to capture international investment funds. The U.S. will lose its competitive edge for foreign capital – and lose jobs for Americans in the process – if it leaves $6.8 billion on the table for other nations to acquire.
- From 2005-2013, EB-5 brought in a minimum of $5.2 billion in private investment to the U.S. – with a minimum of $1.6 billion in 2013 alone. This is according to a June 2015 study commissioned by the EB-5 Investment Coalition.
- Assuming all minimum requirements are met for each investment, investments through the EB-5 program in 2013 would create 31,000 American jobs, according to the Coalition’s June 2015 study.
“Smart government policies are critical to enable America to compete in the global marketplace to attract foreign investment dollars – and put Americans to work – in rebuilding infrastructure, modernizing buildings, and developing resilient 21st century communities where we live, work, and play,” said DeBoer. “Businesses, local economic development agencies, and other key stakeholders should not wait. They should now urge their Senators and Representatives to act swiftly to reauthorize EB-5 after Labor Day, with the findings of the GAO report as a guide for reform.”
See The Roundtable’s webpage for more information.
