By Alan Nevin
The West Coast of Canada has seen a remarkable influx of folks from China and Taiwan over the past quarter century. One of the prime reasons for this is the availability of a “business immigration program.” The program is simple: Bring in $250,000 and put 10 people to work in a new enterprise within three years and Canada will give you a permanent green card for your immediate family. With each $250,000 you add, you can repeat the same immigration program. The program was created in 1986.
The U.S. came out with a similar program in 1991. It’s called EB-5 and more commonly known as the “investment green card” program; however, the U.S. program requires $1,000,000, four times the Canadian amount. The resulting immigration, as you might imagine, has paled in comparison to Canada. Since 1991, the U.S. has granted 3,400 permanent green cards. In the past year, Canada has issued 13,000 “cards”, 6,943 of them to Chinese.
Between 1991 and 2008, an average of 350 applications were approved in the U.S, In the past three years, business has picked up, with an average of 1,300 cards approved in 2009-2011.
There is one virtually unnoticed clause in the U.S. program: the ability to obtain the same permanent green card for only $500,000, if you create those ten jobs in a redevelopment area (“Targeted Employment Area”). In the past three years, almost 90% of petitions for the program have been in targeted areas.
Very, very gradually, that $500,000 offer is getting the attention of U.S. cities. A key player is the City of Murrieta in nearby Riverside County. Economic Development Director Bruce Coleman has been an active solicitor of folks from abroad and has visited China several times and has conducted a conference in Murrieta for Chinese visiting here. They have also hosted delegations from Viet Nam, Kenya and Iraq.
James Wu, a Senior Advisor with EB5CreateJobs.com in Murrieta, is convinced that the program will prove to be a major financial draw if it is well promoted by cities. Wu says “EB5 can help developers using foreign funds to build new retail centers, hotels, manufacturing or warehouse buildings and help cities attract expanding companies.”
To date, the City of Murrieta has attracted funds for a $12,000,000 shopping center and will create an estimated 600+ jobs directly across the street from City Hall. Now, the trick is that before a permanent green card is issued, the shopping center has to be built and leased. In the interim, a temporary green card is issued.
Building new structures that will house newly created jobs is attracting Chinese residents who like the concept of building projects like shopping centers, hotels and other commercial projects that create jobs. If the planned project doesn’t move forward in a two -year period, the temporary green card is revoked.
I have emphasized the Chinese as likely candidates for the permanent green card, but by no means is it limited to them. Any citizens of other countries can apply for an EB-5.
With my bent toward real estate, it is also important to note that those obtaining a business immigration green card would inevitably buy homes or condominiums. There is little question that the booming Canadian housing market is due largely to the country’s immigration policies. Largely because of immigration, Canada has avoided, almost in entirety, the erratic housing market that we have in the U.S. A large percent of their coastal condominium units are acquired all cash.
In the U.S., it is estimated by the National Association of Realtors that 8% of the total U.S. housing market stems from purchases of homes by foreign citizens. The typical home acquired by a foreign citizen sells for $315,000 and 2/3s pay all cash. The rising price of homes in the upscale foreign markets along with the highly favorable exchange rate has accelerated foreign buying of homes and condominiums in the U.S.. I suspect that tying the foreign appetite for U.S. housing with the EB-5 program could result in a positive impact on our moribund economy.
One would think that if the U.S. is really intent on creating new jobs and, by the way, bringing in foreign investment, Washington would initiate a massive international EB-5 campaign. EB5 is a totally logical program to enhance job growth.