Signs That EB-5 Will Prosper Under A Trump Presidency
Now that the dust has settled on what has been a tumultuous election cycle, the next question that everyone seems to be asking is: what will a Trump Presidency entail? An unconventional president-elect to say the least, Trump steamrolled past establishment skepticism to win the election – capturing the support of millions of Americans through a platform of tough action on immigration and a promise to bring back jobs to the economically neglected corners of the United States. With strong anti-immigration rhetoric having dominated the campaign, immigration attorneys are now left with the question of what a Trump overhaul of the current immigration system means for their clients. As EB-5 practitioners, we too have been bombarded with questions from both prospective EB-5 investors and those that have already invested.
As the Trump campaign has not yet commented specifically on the EB-5 program, the short answer is that there is no answer. However, EB-5 stakeholders remain quietly confident that while there is likely to be a tougher stance on certain aspects of the immigration process, such as security screening and income auditing, for the most part, there are several indications that the EB-5 program will be viewed favorably by a Trump administration.
To begin with, as a real estate mogul hailing from New York City, the real estate capital of the world, Trump knows how important the EB-5 program has been to the city’s fortunes. At the nadir of the Great Recession, the city was on the ropes and the unemployment rate among construction workers in the New York Metropolitan Area stood at a whopping 71%. Where traditional financiers were unable or unwilling to lend money for major construction projects, EB-5 capital stepped in and plugged the gap, helping to push projects that would have otherwise languished in the pipeline. Mansion Global have already predicted that foreign investors will likely cast a vote of confidence in U.S. real estate properties in the long run. Liam Bailey, head of residential research at Knight Frank, a London-based global real estate consultancy was quoted saying that: U.S. residential properties, as an asset class, has been favored among the world’s richest, thanks largely to the country’s relatively healthy economic fundamentals and business environment. The outcome of the presidential election will “hardly at all” have an impact on the luxury real estate market.
In addition, as someone who has built a winning campaign on the basis of bringing jobs to the United States, President Trump will think twice about turning his back on a program that has been proven to create and support jobs around the country. According to IIUSA, between FY2010 to FY2013, the EB-5 program supported 19,395 and 17,161 jobs in California and New York respectively; and the prosperity has not been limited to rich coastal states either – the program supported 2,547 jobs in Ohio and 2,958 jobs in South Dakota during that same period. Overall, during that period, the program supported an average of 29,300 jobs each year. Moreover, Trump is looking to tear up and end negotiations from free-trade agreements such as the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). Countries from these agreements are home to companies representing 90% of total inward foreign direct investment into the US.
Finally, Trump’s own name and brand has been licensed towards one of the large EB-5 projects in the New York Metro area: Trump Bay Street, a 50-story luxury rental apartment building being developed by Kushner Companies – led by none other than Jared Kusher, President-elect Trump’s son-in-law. This Jersey City project has raised close to a quarter of its $50 million funding from EB-5 investments. This project is not the only one in the EB-5 pipeline either. US Immigration Fund, the EB-5 regional center that was retained to seek investors, also announced a partnership last year to build and develop a Trump-branded golf course in Jupiter, Florida. In addition, as reported by the Wall Street Journal, Trump is lending the Trump name to a 33-story luxury hotel and condominium EB-5 development in downtown Austin .
While President-elect Trump himself is not a partner in the financing of these developments, the fact that he has been willing to license his name out to these projects suggests at a minimum, implicit support for the program. Regarding EB-5 reform, it would be logical for Senator Grassley and his allies to make the case that Targeted Employment Area reform would help move projects from urban areas to the rural areas in which Trump has promised to create jobs.
Finally, as the earlier fear of losing potential investors from certain countries has lessened, a Trump Administration has suggested lower taxes and more favorable conditions for foreign investment. “The shock of the result will be replaced by a more nuanced appraisal of the strengths of the U.S. markets—there is so much demand for the U.S. luxury market domestically and internationally, mainly due to the significant outperformance of the U.S. economy compared to just about every other developed world economy,” states Bailey of Knight Frank.
Reprinted with permission.
Mona Shah, Esq. has over 17 years of legal experience, with more than 13 years concentrated in U.S. immigration and family law and litigation. Mona’s extensive knowledge of all facets of U.S. immigration law, and her practical expertise ranges from specialist business petitions to complicated, multi-issue deportation and removal litigation. Her firm, Mona Shah and Associates, represents individual, high profile and corporate clients from all over the world. Mona is highly proficient and experienced in EB-5 law and practice, and is the author of a published book for investors on the EB-5 laws and procedures (EB5 for the Chinese Investor, available on Amazon). The second updated edition is scheduled to be published shortly. Mona is voted Top 25 EB-5 Attorneys by eb5investors.com and Top 10 EB-5 Attorneys by eb5info.com. She is also an adjunct professor at the Zicklin School of Business at Baruch University