It's amusing, as I have noted in connection with the rivalry among H-1B users, when there is internal competition among those using the immigration law both to expand migration and line their own pockets.
In the H-1B case, as noted in an earlier blog, two sets of big companies are scrambling with each other for the limited number of H-1B visas, with the Microsofts and Intels of this country seeking to take away visas from the Indian placement firms; so far, as one can see by reading the text of S.744, the latter are losing.
There is a potential, similar competition in another section of the massive bill — one that pits the residential real estate industry against the medium-scale developers that use capital raised in the EB-5 (immigrant investor) program. Since most of the EB-5 investments are in commercial real estate, we have two sets of real estate interests at odds with each other.
In each case the alien gets a significant immigration benefit, and in each case that involves an investment of $500,000.
My sense is that the proposed S.744 real estate scheme, for aliens over the age of 55, offers a better deal that is a much more secure investment than the existing EB-5 arrangements, and I am looking forward to loud protests from the EB-5 middlemen who will be cut out of this flow of funds. More on this advantage later.
As usual in the immigration business, there are complications and nuances and myriad details.
For the alien's $500,000 in the EB-5 program, he and his family get a set of temporary resident cards when the approved investment starts taking shape; if the deal is finalized and there are no problems, then the family gets a set of green cards. At both stages the investor and his family can work in the United States.
But the investments in EB-5 are often pretty marginal — after all the developers have, by definition, not been able to raise the needed capital in the regular way — and there are plenty of questionable figures in the business, as the recent collapse of a major EB-5 scheme in Chicago indicated. In that case it was the Securities and Exchange Commission, by the way, that broke up the conspiracy, not USCIS, the agency that runs the program.
Further, after years reading the propaganda of the EB-5 industry, I have yet to see anything headlined "Immigrant gets a bonanza from EB-5 Investment," or even "Immigrant gets his money back from EB-5 investment".
Section 4504 of S.744 creates yet another nonimmigrant visa class, Y this time, for an alien, 55 and older, who:
(i)(I) uses at least $500,000 in cash to purchase 1 or more residences in the United States, which each sold for more than 100 percent of the most recent appraised value of such residence, as determined by the property assessor in the city or county in which the residence is located;
(II) maintains ownership of residential property in the United States worth at least $500,000 during the entire period the alien remains in the United States as a nonimmigrant described in this subparagraph; and
(III) resides for more than 180 days per year in a residence in the United States that is worth at least $250,000; and
(ii) the alien spouse and children of the alien described in clause (I) if accompanying or following to join the alien...
The last element quoted above is, at best, awkwardly worded and presumably means that the spouse and children of the investor also get life-long, easily renewable nonimmigrant visas, as does the investor himself. How many under-21 children people aged 55 or over have is likely to be minimal, and one would guess that these offspring would age out of the Y visa eligibility as they pass their 21st birthdays.
There are many advantages to this provision over EB-5 program. Not only is the investment more tangible, and totally in the control of the alien, but there are none of the guarantees about the source of the money that complicate life in the EB-5 program.
The latter denies visas to people who have borrowed the money, and to those who have secured it from criminal activities. The EB-5 program also bars visas to people who get their money from inappropriate sources within the Iranian government as we learned in a multi-pronged case that also involved the old Watergate Hotel in Washington.
A disadvantage of the Y visa, as proposed, is that the holder of it can only work in connection with the real estate he or she has invested in, and the modest requirement that the house in which you live must be worth over $250,000. (The requirement that the house or houses obtained must be purchased above their assessed value should not be much of a problem, because, as I learned as head of the board of real estate assessment appeals in Arlington, Va., most houses (at least there) sell for more than their assessed values.)
While it is enjoyable to watch the competition between the EB-5 and the Y visa categories, there is no public need for either program; both are, in effect, selling the right to live in the United States for minimal sums, and both are needless swelling our populations with people who have secured their visas by simply transferring some money into our real estate sector.
And if we are selling visas for cash, why not demand more? To get the Y-type visa in the Bahamas, for instance, you have to buy — and live in — a $1.5 million house.
