How might EB-5 be affected by a Biden presidency — or the return of Trump?
While Biden is more open to immigration, Trump has spared EB-5 during his crackdown on illegal and legal immigration. Aaron Grau, executive director of IIUSA predicts, “there will be material changes regardless of who is president.”
Though EB-5 was introduced by Congress to spur U.S. economic development, and was approved in the House of Representatives 423-3, it has been a lighting rod in political debates. “This program is an economic development program, but it’s painted with the brush of immigration,” says Grau.
Veteran EB-5 securities attorney Ronald Fieldstone talks about why EB-5 has been ignored thus far by the major political players: ““Immigration is really not being touched, because it’s politically a time bomb.”
So when is the program likely to be reexamined — and possibly changed — by the powers that be? Expect a closer political review of the program around December 11, when the program’s current reauthorization expires.
Biden v. Trump — who’s better for EB-5?
This question is deeper than just the immigration policies of either politician. While Trump is notoriously anti-immigration, he seems to at least implicitly acknowledge that EB-5 is an economic stimulus tool, and that appears to be why the program was excluded from his April 22, 2020, Executive Order suspending immigration into the U.S.
Biden is supportive of immigration, but that doesn’t necessarily mean he will automatically be a proponent of EB-5. Grau and Fieldstone believe that both Trump and Biden are careful to avoid a political backlash when it comes to the program, thus it might be prudent to expect either administration to tread carefully when it comes to making substantive changes to EB-5.
Senate control is a key factor
Fieldstone points out the importance of the Senate when trying to predict the future of EB-5: “Who wins the Senate control… oversees Homeland Security which oversees USCIS, which runs the EB-5 program.”
The veteran attorney also reminds us that party lines don’t always dictate support for EB-5; rather, political support of the program is often decided by urban versus rural interests.
Historically, EB-5 money has been used to finance big urban developments, but changes to the defining of a Targeted Employment Area, implemented in the Modernization Rule last November, have gone a long way to refocusing job creation toward rural and (slightly) impoverished urban areas and urban developers are suddenly at the disadvantage as per the original vision of the program.
Another factor is the charge for EB-5 program reform, particularly integrity measures. Senators Chuck Grassley (R-Iowa) and Patrick Leahy (D-Vt.) have worked together for years to lobby for EB-5 reform (and provide a compelling example of EB-5 politics crossing over party lines). “There’s a good chance one of them could come to chair the Senate Judiciary Committee and set the tone for EB-5’s future,” says Fieldstone.
Grau declares that the EB-5 industry will happily support such program reform: “Senior staff at USCIS, Sen. Grassley’s office, Sen. Leahy’s office, the Judiciary Committee staff on the House side all agree that any reauthorization of the program needs to include integrity measures.”
Can a new administration reinvigorate the U.S. global reputation — and interest in EB-5?
Immigration lawyer Rohit Kapuria states that global demand for EB-5 has decreased because, “there is a sentiment globally that the U.S. under this administration is not immigrant-friendly.”
Could a Biden win reverse that sentiment? Given Trump’s aggressively hostile stance to even legal immigration, one would hope foreigners would view a Biden-led U.S. through a different lens.
Uncertainty is the most immediate hurdle EB-5 faces
Fieldstone says that the first hurdle to cross is simply having the election. “Number one, getting the election over is good. It doesn’t matter who wins. It’s good to get the election over… the uncertainties in positions taken by the politicians and the parties will become much more clear.”
While certainty is welcome, a leader who welcomes foreigners into the U.S. would be embraced by many EB-5 stakeholders and would-be investors.
Read the Bisnow article “Here’s What Could Happen To The EB-5 Program In A New Administration”